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Judgment
A. Packiaraj, J.—This revision has been filed by accused 3, 5, 7, 9 and 10 in CC No.91 of 2001 on the file of the Judicial Magistrate No.1,
Namakkal, against the order made in Crl.M.P.No.1865 of 2001 in CC No.91 of 2001 on the file of the Judicial Magistrate No.1, Namakkal,
dismissing the petition filed by the petitioners to drop proceedings against them.
2.The gist of the complaint is as follows :-
a)The first accused is Kongu Spinning Mills, represented by its Managing Partner, C. Rajendran. The second accused is C. Rajendran, Managing
Partner, Kongu Spinning Mills, while the other accused 3 to 11 are alleged to be the partners, who are in-charge of the conduct of the business
and responsible for the day to day affairs of the firm.
b)The further case of the complainant is that the accused had borrowed money on behalf of the above said firm, from the complainant on various
dates and in order to discharge the above said debt, the second accused, on behalf of the first accused and other accused, had issued a cheque
drawn on South Indian Bank Ltd. for Rs.10 lakhs dated 01.11.2000 and the said cheque was signed by the second accused as Managing Partner
of the above said firm. The said cheque was presented in the State Bank of India, Namakkal on 29.12.2000 but the same as returned on
03.01.2001, with endorsement, ""insufficiency of funds"". The complainant received the intimation on 12.01.2001 and on 15.01.2001, he issued a
notice, as contemplated under the Negotiable Instruments Act to the accused and it is said that the accused 3, 4, 5, 6 and 10 have received the
notice on various dates i.e. on 20.01.2001, 18.01.2001, 18.01.2001 and 24.01.2001, while accused 1, 2, 7, 8, 9 and 11 have refused to receive
the notice, even though intimation was given to them. It is further submitted that a reply has been issued on behalf of the accused, containing false
averments. Since money has not been paid within the mandatory period, the present complaint has been filed against the accused.
c)Accused 1 and 2 have not preferred any application for dropping the proceedings. But the accused 4, 6, 8 and 11 have filed a petition in Crl.
M.P. No.1864 of 2001 before the Judicial Magistrate No.1, Namakkal, to drop the proceedings and the same was dismissed Hence, they have
filed revision in Crl. R.C. No.1026 of 2001, before this court, while the accused 3, 5, 7, 9 and 10 had filed Crl. M.P. No.1865 of 2001 before
the said Magistrate, for the same relief and it was also dismissed, against which the present revision is filed.
3.The point that has been raised by the petitioners is that the petitioners are not partners of the first accused firm, but are the wives of accused
Nos.2, 4, 6, 8 respectively and they have nothing to do with the firm as such, and hence their implication in the case is mala fide and that the
proceedings against them has to necessarily be dropped.
4.To substantiate the fact that they are not partners, the petitioners have produced ''Form-A'' from the Office of the Registrar of Firms, which
indicates that it is only accused Nos.2, 4, 6, 8, 11 and on Periyasami, who is not arrayed as accused, are partners and according to the learned
counsel for the petitioners, a bald allegation has been made in the complaint which reads as follows:-
The accused No.2 is the Managing Partner of the above said firm and the other accused are the partners of the above said firm. The accused firm
is a spinning mills producing yarns of various kinds from cotton. The accused 2 to 11 are in-charge and conduct of the business and also
responsible for the day to day affairs of the above said firm. The accused 2 to 11 are responsible for the commissions and omissions of the above
said firm by virtue of partnership
5.The sum and substance of the argument of the learned counsel for the petitioners is that there is no material in the entire complaint to substantiate
the guilt of the petitioners and the mere allegation not supported with any materials is not enough to launch prosecution.
6.It is further contended that when a notice was issued by the complainant to the accused stating that they were the partners of the firm and were
responsible for its conduct, accused Nos. 4, 5, 6, 10 and 11 sent a reply notice stating that they are not in-charge of the conduct of the day to day
business of the complainant mills and that the complainant has unnecessarily roped in, the wives of accused nos.2, 4, 6 and 8 who have nothing to
do with the running of the firm. (Though the reply notice contains other particulars they may not be very relevant for the purpose of deciding this
case). The complaint has been filed only on the receipt of this reply notice and the complaint specifically states that A-2 to A-11 are in-charge of
the business and administration of the firm, according to the partnership deed and it is to be noted that the complainant has failed to produce any
material, much less the partnership deed which would disclose as to who really the partners are and who is in-charge of the administration and
conduct of the business. On the other hand, the petitioners herein have produced Form-A certificate, from the office of the Registrar of Firms,
which according to them is a public document and the court is entitled to peruse the same and that it is seen that these petitioners did not play any
part in the administration of the mills and as such, they cannot be saddled with any criminal liability. Since this document produced by the
petitioners herein is a public document, which would throw light on the actual partners, it shall be considered at a later stage, since it has not been
brought on record as on date. Be that as it may, this court is only constrained to find out whether there is any case made out are not on its own.
7.The fact that the second accused signed the cheque on behalf of A-1 and other accused and issued it to the complainant is not challenged at
present. The only bone of contention in this petition is whether these petitioners are partners or administrators of the the first accused company and
they are in-charge of the day to day affairs and administration of the firm and as such, whether they come under the purview of Section 141
Negotiable Instruments Act.
8.Per contra, the learned counsel for the complainant would argue that the trial has not proceeded and if the allegations in the complaint mentions
that the petitioners are partners and that they are in-charge of the day to day administration of the company, nothing more is needed for the court
to take congnizance. The truth or otherwise in the complaint cannot be gone into by the magistrate or this court at this stage.
9.In support of his contention, the learned counsel for the respondent cited the decision reported in Karumuthu C. Sundaran and 5 others vs.
Indian Bank Merchant Banking Services Ltd. reported in 2001 1 LW Crl. 326 wherein his Lordship M. Karpagavinayagam has considered the
various decisions of the Supreme court and ultimately following the said decisions have held that it is enough if the complainant mentions that the
accused were in-charge and responsible for the conduct of the business of the company for the magistrate to take cognizance, which would come
within the purview of section 141 of the negotiable instruments act.
10.Therefore, two questions arise in this case :-
i) Whether there is any material to show that the petitioners are partners or that mere allegation made by the complainant that they are partners will
ipso facto be sufficient to hold that they are partners ?
ii) What is the allegation or averment that is needed for prosecuting a person u/s 138 of the Act, who is alleged to be a partner but in fact, not a
partner ?
11.In the present case, no doubt, as stated in the earlier part of this order, the complainant has averred that A-2 to A-11 are partners and they are
in charge and conduct of the business and are responsible for the day to day affairs of the said firm. They are responsible for the commission and
omission of the above said firm. Apart from this there is absolutely no other allegation. The complainant has filed the complaint only on receipt of
the reply notice and the complaint specifically states that A-2 to A-11 are partners and are in-charge of the day to day affairs of the company as
per the partnership.
12.In normal circumstances, I feel that it would suffice to launch prosecution u/s 138 of the Act. But here is a case when immediately after the
cheque has been dishonoured, a notice has been issued to the petitioners. However, a copy of the same has not been placed along with the
complaint, though unserved covers to the other accused have been kept.
13.Be that as it may, the petitioners have replied the same and have clearly come out with a version that they are not partners. In addition, they
have clearly stated that it is only A-2 4, 6, 8, 11 and one Periyasami are partners. Though the notice speaks of other details, about the difference
of opinion between the partners, it may not be necessary for me to dwell upon all these particulars. Suffice to say that as early as 8.2.2001, the
petitioners have by way of legal notice indicated to the complainant/respondent that they are not partners. But still, the respondent has filed the
complaint against them for the above said offences.
14.I am conscious of the fact that when prosecution is launched u/s 138 NIA, there is a rebuttable presumption on the accused and it is for him to
establish that he is not liable to pay the amount. However, in my opinion, the duty is cast on the complainant to come out with an averment for
which he can fortify with substantive evidence in case of necessity. This is one such case. The complainant has not only averred that they are
partners but has further gone to the extent of saying that they are partners as per the ''partnership''. Therefore, when he refers to a particular deed
on the basis of which he terms these petitioners to be partners and when the accused are denying that they are partners even before the launching
of the complaint, the complainant should have produced that document to establish the same. It would not be out of place for me to state that when
anybody relies on a document that needs to be registered, oral evidence is prohibited from being given, except the production of the document
itself as contemplated u/s 92 of the Indian Evidence Act. When the said document has already been admittedly reduced into writing as
contemplated u/s 91 of the Indian Evidence Act, in such cases, having stated in the complaint that the petitioners are partners according to the
partnership deed, then the complainant ought to have produced the partnership deed. In my opinion, the failure on the part of the complainant to
do so and merely asserting that they are partners, when it has been specifically denied at the earliest stage by the accused would not be sufficient
for launching prosecution.
15.Even at the revision stage, when time was specifically granted to the petitioners to bring about materials to show that they were partners, the
complainant did not do so.
16.As far as the reliance to be placed on Form -A certificate obtained from the Registrar of Firms, decisions were cited by the bar on either way
that mere production of a document by the accused without being duly marked and that too before the commencement of trial should not be
considered. Since there are conflicting views I am not constrained to pass any considered opinion on that issue. I place reliance on the document
namely, partnership deed in the present case only for my personal satisfaction and to lend assurance after coming to a conclusion that the
prosecution had no other materials to support their case that they are partners, and since the complainant has averred that the petitioners are
partners as per the partnership deed.
17.Yet another decision of the Apex Court which supports the claim of the petitioners is the decision made in G. Sagar Suri and Another Vs. State
of U.P. and Others, : wherein Their Lordships have held that when the complainant launched a complaint with mala fide motive to rope in all
members of the family for non-payment of loan amount without regard to their role or participation, such complaint is an abuse of process of law
and the proceedings are liable to be quashed.
18.Hence, I see that the prosecution against the petitioners cannot come under the category of Section 141(1) of the Negotiable Instruments Act.
19.The next question that arises for consideration is what is the position if they are not partners. If the person who is made an accused is not
partner, section 141(2) of Negotiable Instruments Act, states when the company has committed offence, any other person is also liable provided,
the said act has been done with the consent or connivance or attributable to any neglect on the part of any such person i.e. to say that there must
be satisfying materials or averments in the complaint that the petitioners had committed offence and that the cheque in question was issued with
their consent or connivance or the offence is attributable to any neglect on the part of the petitioners. This clause also is conspicuously not present
in the complaint and hence the petitioners do not come under the provisions of Section 141(2) of the Negotiable Instruments Act either.
20.The learned counsel for the petitioner would argue that the revision itself is not maintainable in law. Since according to the learned counsel, it is
interlocutary order. The learned counsel also placed reliance on the decision of this court made in Classic Apparels Limited rep. By its Managing
Director Vs. M/s. Arizona Exports made in Crl.R.C.No.999 of 2000, wherein His Lordship Justice B. Amber Basha Khadiri has considered the
powers to be exercised under 482 Cr. P.C in dealing with cases of this sort and has held that as charges could not be framed in a summons case,
the question of discharge does not arise.
21.It is true that discharge does not arise in a summons case. But even if the petitioner prays for discharge in such cases, we cannot give a
restrictive meaning to the word discharge, instead we can interpret it as dropping the proceedings against them. As a matter of fact, the Supreme
Court in SLP No.640/99, have in clear terms, stated that the accused can raise these particular points (involved in that case) and file a petition to
discharge. The said case also relates to prosecution u/s 138 N.I. Act. Therefore, in my opinion, instead of giving a restricted meaning to the actual
words, we have to see the purport of the petition or the result the petitioner seeks for. In this context, I cannot but refer to the oft quoted decision
of the Supreme Court in Amarnath Vs. State of Haryana reported in 1978 SCC (Crl,)585 which as follows:-
2.The concept of interlocutory order qua the revisional jurisdiction of the High Court was completely foreign to the earlier 1898 Code and the
1955 Amendment to that Code. Under the 1955 Amendment widest possible powers of revision had been given to the High Court under Sections
435 and 439 of the 1898 Code and the High Court could examine the propriety of any order, whether final or interlocutory, passed by any
subordinate court in any matter. In the 1973 Code Section 397(2) was incorproated with the avowed purpose of cutting out delays and ensuring
that the accused persons got a fair trial without much delay and the procedure was not made complicated. Section 397(2) provided that the
powers of revision shall not be exercised in relation to any interlocutory order. The paramount object in inserting this new provision was to
safeguard the interests of the accused.
(3)The term ""interlocutory order"" in Section 397(2) of the 1973 Code has been used in a restricted sense and not in any broad or artistic sense. It
merely denotes orders of a purely interim or temporary nature which do not decide or touch the important rights or the liabilities of the parties. Any
order which substantially affects the right of the accused, or decides certain rights of the parties cannot be said to be an interlocutory order so as to
bar a revision to the High Court against that order, because that would be against the very object which formed the basis for insertion of this
particular provision in Section 397 of the 1973 Code. Thus, for instance, orders summoning witnesses, adjourning cases, passing orders for bail,
calling for reports and such other steps in aid of the pending proceeding, may no doubt amount to interlocutory orders against which no revision
would lie u/s 397(2) of the 1973 Code. But orders which are matters of moment and which affect or adjudicate the rights of the accused on a
particular aspect of the trial cannot be said to be interlocutory so as to be outside the purview of the revisional jurisdiction of the High Court.
22.In the present case when the rights of the petitioners are decided once and for all it certainly amounts to a final order in relation to that particular
issue and consequently a revision is maintainable.
23.Hence I see that the prosecution against the petitioners herein is not maintainable and accordingly quash the proceedings in so far as it relates to
them.