Judgment:
V.R. Kingaonkar, J.
1. Challenge in this revision petition is to judgment dated 19th June, 2006 rendered by learned Ist Adhoc Additional Sessions Judge, Dhule, in Criminal Revision Application No. 61/2006 whereby and where under process issued against respondent Nos. 1 and 2 for offence punishable under Section 138 of the Negotiable Instruments Act vide order dated 20th August, 2005 by learned Judicial Magistrate (F.C.), Dondaicha, came to be quashed.
2. The petitioner is a Cooperative Bank. An amount of Rs. 15 lacs was borrowed for and on behalf of M/s New Sheetal Traders. The petitioner - Bank filed a private complaint case (S.T.C. No. 311/2005) in the Court of Judicial Magistrate (F.C.) at Dondaicha against M/s New Sheetal Traders, Sheetal Ramesh Jain and the respondent Nos. 1 and 2. There is no dispute about the fact that original accused No. 2 Sheetal is the son of respondent Nos. 1 and 2. The petitioner asserted that M/s New Sheetal Traders is a firm of Undivided Hindu Family (UHF) of the respondent Nos. 1 and 2 and their son. All the three (3) members of the Undivided Hindu Family are the members of the Cooperative Bank. They gave postdated cheques of Rs. 15 lacs each on 22nd February, 2005. One of the cheques bearing No. 067702 was to be encashed on 15th March, 2005 and another cheque bearing No. 067703 was to be encashed on 24th March, 2005. Both the cheques were signed by accused No. 2 Sheetal for and on behalf of his parents and the business firm. Both the cheques were dishonoured. Though demand notice was issued to the firm or joint family business concern, accused No. 2 Sheetal and the respondent Nos. 1 and 2, yet, the amounts were not paid. The respondent No. 2 gave reply to the notice on 18th May, 2005 wherein the liability was impliedly admitted, but nothing was paid. Consequently, after stipulated period, the criminal complaint case was instituted by the petitioner for offence punishable under Section 138 of the Negotiable Instruments Act.
3. The learned Judicial Magistrate considered verified statements of PW Jitendrasing in support of the complaint and heard learned advocate for the petitioner. He issued process for offence under Section 138 of the Negotiable Instruments Act against all the four (4) accused, including the respondent Nos. 1 and 2.
4. Aggrieved by the order of issuance of process, the respondent Nos. 1 and 2 preferred Criminal Revision Application No. 61/2006 in the Court of Sessions at Dhule. The learned Ist Adhoc Additional Sessions Judge held that the respondent Nos. 1 and 2 are neither partners of M/s New Sheetal Traders nor are signatories of the cheques in question and, hence, were not liable to be summoned under the order of the learned Magistrate. He held that the respondent Nos. 1 and 2 are not shown to be concerned with the firm styled as M/s New Sheetal Traders. It is only a proprietary firm run by original accused No. 2 Sheetal Jain. So, the issuance of process against the respondent Nos. 1 and 2 was held as illegal and hence, came to be quashed.
5. Heard learned Counsel for the parties and learned A.P.P.
6. Mr. Kapadia, would submit that the respondent Nos. 1 and 2 could not be prematurely absolved from the criminal liability. He would point out from copy of the certificate issued by the Shop Inspector, Dhule on 2nd April, 2005 that the shop styled as M/s New Sheetal Traders was closed with effect from 1st April, 2005 as per application submitted by accused No. 2 Sheetal. He would submit that accused No. 2 Sheetal has gone underground to avoid the liability. He would submit further that the demand notice was issued to all the members of the joint family with categorical assertion that it was their joint business and all of them were liable to repay the loan amount. It is contended that the question as to whether joint liability will be established or not is required to be decided after the regular trial. Mr. Kapadia further submitted that the expression 'or association of individuals' as appearing in Section 141 of the Negotiable Instruments Act would cover the criminal liability of the respondent Nos. 1 and 2. Consequently, he urged to allow revision petition. As against this, learned advocate Mr. Mane supports the impugned judgement.
7. At the threshold, it is worthwhile to mention that the respondent Nos. 1 and 2 did not deny the legal liability to repay the amount so borrowed for and on behalf of M/s New Sheetal Traders. They executed a Promissory Note along with original accused No. 2 Sheetal at the relevant time. The averments in the complaint would show that the petitioner categorically stated that M/s New Sheetal Traders (accused No. 1) is a partnership firm and the respondent Nos. 1 and 2 are the partners thereof. It is further asserted in the complaint that M/s New Sheetal Traders is joint family concern of which the respondent Nos. 1 and 2 are co-partners, and all of them are members of the Cooperative Bank/petitioner. The respondent Nos. 1 and 2 are the parents of original accused No. 2 Sheetal. There is absolutely nothing on record to show that they have separated from accused No. 2 Sheetal by way of partition. Whether the business of M/s New Sheetal Traders is run only by accused No. 2 Sheetal as sole proprietor or that it is a joint family business can be determined only after the full dressed trial. At a premature stage, the process could not be quashed against the (6) respondent Nos. 1 and 2, merely because there is no registered partnership deed.
8. It is well settled that in a joint family business, no member of the family can say that he or she is the owner to the extent of any particular share in the profits and assets. There is unity of ownership and community of interest. The pattern of accounts of the joint family business is different from those of a partnership. In the case of joint Hindu family business, the shares of the individual members in the profits and loss are not worked out unlike in case of partnership account. So far as the joint Hindu family business is concerned, the Manager is liable not only to the extent of his share in the joint family property, but also personally.
9. The Explanation appended to Section 141 may be considered for the present purpose. It reads as follows.
141. Offences by companies. -
(1) *****(2) *****Explanation - For the purposes of this section, -
(a) 'company' means any body corporate and includes a firm or other association of individuals; and
(b) 'director', in relation to a firm, means a partner in the firm.
10. A plain reading of the expression 'company' as used in Sub-clause (a) of the Explanation is that it is inclusive of any body corporate or 'other association of individuals'. The term 'association of individuals' will include club, trust, HUF business, etc. It shall have to be construed ejusdem generis alongwith other expressions 'company' or 'firm'. Therefore, a joint family business must be deemed as a juristic person like a company or firm. When it is specifically alleged that the respondent Nos. 1 and 2 are the joint proprietors/owners of the business of M/s New Sheetal Traders, which is a joint family business of themselves and their son - Sheetal, prima facie, they are covered under Section 141 of the Negotiable Instruments Act in view of the Explanation appended thereto.
11. In Baskar v. Muthuswamy (2001) 106 Comp Cas 489 a Bench of Madras High Court held that where there were positive allegations in the complaint that the accused was partner of the firm, but he denied his such status on strength of extracts from Register of Firms, it was improper to go into evidence at the premature stage. It was held that the true state of affairs could only be gone into at the stage of trial. Hence, the Bench of Madras High Court declined to quash the process issued against the accused. It is also well settled in view of Nair (K.P.G.) v. Jindal Menthol India Ltd. (2001) 104 Comp Cas 290 that the words of Section 141(1) need not be incorporated in a complaint as magic words but substance of the allegations read as a whole, should fulfil its requirements.
12. Section 141 is comprehensive. It would cover all types of business organisations, which are shown therein. The definition is inclusive and is used to convey something more than what is defined. Consequently, the term 'association of individuals' will include Hindu Undivided Family of which the business is said to be a joint concern. Section 138 of the Negotiable Instruments Act, 1881 is enacted in order to safeguard the credibility of commercial transactions and to prevent bouncing of cheques by providing personal liability against the drawer of the cheque. In case of a cheque issued by the firm, the drawer of the cheque is the firm. In case of cheque issued by the business firm of Joint Hindu Family, all the members can be roped into as the drawers of the cheques though signatory is one of them. Under these circumstances, the impugned order is unsustainable. The learned Sessions Judge failed to see that quashing of the process at the premature stage was not called for in view of the Explanation appended to Section 141 of the Negotiable Instruments Act. In any case, at such a premature stage, the process ought not to have been quashed against the respondent Nos. 1 and 2. The prospective defence of the respondent Nos. 1 and 2 could not be a sufficient ground to quash the order of process issued against them. Needless to say, the impugned order is patently illegal and liable to be interfered with and deserves to be set aside.
13. In the result, the revision application is allowed. The impugned judgement of the learned Ist Adhoc Additional Sessions Judge rendered in Criminal Revision Application No. 61/2006 is set aside and the order of the learned Judicial Magistrate is restored.