Sai Tractors, Sagar vs Sai Tractors, Bina

R.C. Mishra, J.—With consent the matter is finally heard.

This is a petition u/s 482 of Code of Criminal Procedure, for quashing the proceedings pending as Criminal Case No. 224/08 before the J.M.F.C., Bina. In that case, cognizance of the offence of u/s 138 of the Negotiable Instruments Act, 1881, was taken upon a complaint made by the respondent regarding dishonour of cheque for a sum of Rs. 19,70,228/-.

For the sake of convenience, the petitioner no. 1, M/s Sai Tractors and Traders, Sagar and the respondent M/s Sai Tractors and Traders, Bina shall be referred to as ''Sagar Firm'' and ''Bina Firm'' respectively.

According to the petitioners, their prosecution for the offence is an abuse of the process of the Court as the cheque was not issued for discharge of legally recoverable debt or liability. To buttress the contentions, reference has been made to the following background facts -

(i) Shivkesh Chandra Sachar (for short ''Shivkesh''), who has filed a complaint on behalf of Bina Firm, was also a partner of the petitioner no. 1/Sagar Firm.

(ii) The retirement deed dated 31.3.2006 (Annexure P-6) referred by Shivkesh was an unilaterally executed document as it did not contain signatures of other partners of the Firm and was not in conformity with the Clause 10 of the Partnership deed (Annexure P-1), that reads as under -

That, in the event of retirement of any partner, final account will be the date of retirement shall be made up and anything found due from the outgoing partner shall be recovered from him in a way mutually decided and anything is found due to the outgoing partner it shall be paid to him as decided by the partners.

(iii) There was no occasion to incur liability to pay an amount of Rs. 19,70,228/- covered by the cheque as the Sagar Firm was incurring huge financial liability and was running in loss and this fact was also highlighted by Debt Recovery Tribunal in its judgment dated 12.5.2010.

(iv) As reflected in the partnership deed (Annexure P-3), respondent no. 1 is not a registered partnership Firm.

In response, while making extensive reference to the documents filed along with the reply, learned Counsel for respondent has submitted that -

(i) It was upon a settlement arrived at between the parties that the business being run by M/s Sai Tractors and Traders at Sagar and Bina was bifurcated.

(ii) In accordance with the terms of the settlement reduced in writing (Annexure R-2), Shivkesh had sought retirement from the Sagar Firm and

(iii) The resignation deed was acted upon by informing the Area Manager of Escort Ltd., Income Tax Officer and Sales Tax Officer concerned and the letter addressed to Area Manager of Escort Ltd. bore signatures of Smt. Suchitra Sachar, impleaded as the partner of accused/Petitioner no. 1 Sagar Firm.

In support of the contention that the complaint as to dishonour of cheque made by unregistered partnership firm viz. the respondent, is not maintainable, learned Counsel for the petitioner has placed implicit reliance on a Division Bench decision of the Andhra Pradesh High Court in Mr. Amit Desai and Another Vs. Shine Enterprises and State,

However, as explained by the Supreme Court in National Small Industries Corporation Ltd. Vs. State (NCT of Delhi) and Others, , if the payee is a company, necessarily the complaint should be filed in the name of the company. Section 142 of the Act does not specify who should represent the company, if a company is the complainant. A company can be represented by an employee or even by a non-employee authorized and empowered to represent the company either by a resolution or by a power of attorney. Needless to point out that in view of the explanation appended to Section 141(2) of the Act, "company" means any body corporate and includes a firm or other association of individuals.

Still, placing reliance on the decision of a coordinate Bench of this Court in Mahesh Vs. Ramakant, learned Counsel for the petitioners has submitted that the offence, u/s 138 of the Act, would not be made out in view of the fact that the cheque was issued after settlement of accounts of the partnership. However, in that case, the conviction of the revisionist was set aside on the ground that the complainant had failed to prove that the cheque was given in respect of any legally enforceable liability whereas in the present case, the evidence is yet to be recorded.

A three-Judge Bench in Rangappa Vs. Sri Mohan, has already overruled the observation made in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (wherein the view expressed in M.S. Narayana Menon @ Mani Vs. State of Kerala and Another, was reaffirmed) to the effect that existence of legally recoverable debt is not a matter of presumption u/s 139 of the Act. As explained therein, -

Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption u/s 139 is a device to prevent undue delay in the course of litigation.

For these reasons, I am of the view that it is not a fit case for interference under the inherent powers.

The petition, therefore, stands dismissed. However, learned trial Magistrate is expected to expedite the trial. As an obvious consequence, stay order dated 21.11.2011 is hereby vacated.