Judgment:
ORDER
N.K. Mody, J.
1. This order shall also govern the disposal of M.Cr.C. 901/09 and 902/09 as in all the petitions the parties are one and same and order under challenge is also one and same.
2. Being aggrieved by the order dated 21-11 -2008 passed by III ASJ, Khargone in Cr. Rev. No. 50/2008 whereby the order dated 8-1-2008 passed by CJM, Khargone in Cr. Case No. 27/2008 whereby the cognizance was taken against the petitioners under Section 138 of the Negotiable Instruments Act (which shall be referred hereinafter as the 'N.I. Act'), the present petition has been filed.
3. Short facts of the case are that respondent filed a complaint under Section 138 of the NI Act against M/s Krishna Finance Co. registered Partnership Firm having its office at M.G. Road, Khargone alleging that petitioners and five other persons are partners of the said firm. It was alleged that a cheque of Rs. 1 lac dated 15-6-2007 was issued by the firm which was signed by accused Kailashchand Mahajan and Dwarkadas. It was alleged that cheque was dishonoured. After return of the cheque from the bank notice was issued but in spite of that the amount was not paid, hence it was prayed that after notice to the petitioners and other partners of the said firm they be convicted.
4. After taking the cognizance the petitioners filed a revision petition before learned Sessions Court alleging that learned Trial Court committed error in taking cognizance of the offence. It was alleged that since in the complaint it is nowhere stated that petitioners were at the time of offence were incharge of and 'were responsible for the conduct of the business, therefore, petitioners cannot be prosecuted. It was prayed that revision be allowed and impugned order passed by the learned Trial Court be set aside. The revision petition was contested by the respondent. After hearing the parties learned Court below dismissed the revision petition against which the present petition has been filed.
5. Learned Counsel for petitioners submits that impugned order passed by both the Courts below is illegal and deserve to be set aside. It is submitted that in the complaint filed by the respondent it is stated that Kailashchand who was arrayed as accused No. 8 in the complaint is the active partner of the firm. It was further stated in the complaint that share of each of the partners including the petitioners were equal in the said firm. It is submitted that in the complaint it is nowhere stated that petitioners were incharge of the business of the company at the relevant time. It is submitted that in view of this the petition filed by the petitioners be allowed and impugned order passed by the learned Court below be set aside.
6. For this contention reliance was placed on a decision of Hon'ble Apex Court in the matter of N.K Wahi v. Shekhar Singh : AIR 2007 SC 1454, wherein Hon'ble Apex Court has held that 'complaint must contain specific allegations against Directors as to how Directors are incharge and responsible for conduct or business of Company. Description should be clear. Mere allegation in complaint that accused persons are Directors and responsible officers of the Company is not sufficient and process issued against Directors is liable to be quashed'. Reliance was also placed in the matter of Saroj Kumar Poddar v. State : AIR 2007 SC 912 : 2007(5) M.P.H.T. 431 (SC), wherein Hon'ble Apex Court has held that 'with a view to make a Director of a Company vicariously liable for the acts of the Company, it is obligatory on the part of the complainant to make specific allegations as are required in law'. Further reliance was placed on a decision in the matter of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla : AIR 2005 SC 3512 (1), wherein Hon'ble Apex Court has held that 'averment that accused was at the time of offence in charge of and responsible for conduct of business of Company is essential and Director of Company should not be deemed to be vicariously liable merely by virtue of office he holds'. Reliance was also placed on a decision in the matter of Sabitha Ramamurthy v. R.B.S. Channabasavaradhya : AIR 2006 SC 3086 (1) : 2006(4) M.P.H.T. 212 (SC), wherein in a case where the complaint was filed against Company it was held that vicarious liability of other accused viz., M.D. and other Directors can be inferred only if clear statement of fact that accused-Directors were in-charge of business of the Company is made in complaint. Complainant should also state on oath as to how offence has been committed and how accused persons are responsible therefor. Neither complaint nor complainant's statement on oath containing requisite statement and issuance of process against accused-Directors is improper. Reliance was also placed on a decision in the matter of Raghu Laxminarayanan v. Fine Tubes : AIR 2007 SC 1634, wherein complainant was not stating as to in which capacity appellant had been serving business concern, Hon'ble Apex Court has held that 'prima facie cases of vicarious liability against appellant is not made out and order of High Court declining to exercise jurisdiction under Section 482 to quash complaint against appellant is liable to be set aside'. Lastly reliance was placed on a decision in the matter of Monaben Ketanbhai Shah v. State of Gujrat : AIR 2004 SC 4274, wherein Hon'ble Apex Court has held that averment in the complaint that accused at the relevant time were incharge of and responsible to firm for conduct of business is necessary and in absence of requisite averment in the complaint, the offence against accused cannot be made out and discharge of accused was proper.
7. On the strength of aforesaid decision, learned Counsel for petitioners submits that petition filed by the petitioners be allowed and impugned order be quashed.
8. Learned Counsel for respondent submits that no illegality has been committed by the learned Trial Court in taking the cognizance and by learned Revisional Court in dismissing the revision which can be corrected by this Court while exercising the jurisdiction under Section 482, Cr.PC. Learned Counsel submits that in the complaint respondent has specifically pleaded that partnership firm which includes the petitioners and other partners who were the accused before the learned Court below are responsible for payment of cheque amount. It is submitted that partnership firm is governed as per provisions of Section 25 of the Indian Partnership Act, according to which every partner is jointly liable with all the other partners and also severally for all acts of the firm while he is a partner. It is submitted that for making out a prima facie case, sufficient fact has been stated in the complaint, hence petition filed by the petitioner be dismissed. For this contention, learned Counsel placed reliance on a decision in the matter of Malwa Cotton and Spinning Mills Ltd. v. Virsa Singh Sidhu and Ors. 2008 AIR SCW 5537, wherein in the complaint the allegation against the Directors were general, Hon'ble Apex Court held that it is not a ground to quash the proceedings. It is submitted that in the said decision, reliance has been placed by the Apex Court on the earlier decision.
9. From perusal of record, it reveals that respondent has placed reliance on Partnership Deed of which reference is in the complaint in Clause 8 of Partnership Deed which is filed before this Court and marked as Annexure P-5 it is specifically mentioned that Kailashchand s/o Babulal Mahajan shall be the active partner of the firm for which a sum of Rs. 30,000/- shall be paid by the firm. In Para 13 of the Deed, it is mentioned that any of the two partners shall be able to operate the bank account while in Para 16, it is mentioned that firm can enter into a contract business agreement with mutual consent of the partners and business shall be treated as Partnership Firm business. It is submitted that petition be dismissed.
10. In the complaint, it is stated that M/s Krishna Finance Company is a registered partnership firm and Kailashchand Mahajan/accused is active partner of the said firm while other petitioners are having equal right in the said firm. In Para 10 of the complaint, it is stated that each of the petitioner is liable for payment of cheque amount. Apart from this, it has been stated in the complaint that each of the members are having equal share in the said partnership firm.
11. Section 25 of the Indian Partnership Act, 1932 lays down that every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. This relates to civil law. So far as law laid down by Hon'ble Apex Court in the matter of Malwa Cotton and Spinning Mills Ltd. (supra), is concerned, in this case the plea raised by one of the Directors was that he had intimated the Company of his desire to resign much before the cheque was issued, in that context, the Hon'ble Apex Court has held that it cannot be a ground to quash proceedings initiated against him. The plea raised, gives rise to questions of facts, such as, whether the accused-Director had intimated the Company and whether there was any resolution accepting his desire and what was the effect of delay by Company in submitting requisite form before Registrar of Companies. Resolution of such questions requires leading of evidence and can only be decided in trial.
12. After going through the complaint and also the statement of complainant on Oath it can safely be said that there is no averment that petitioners were in-charge of or responsible for conduct of business of firm. After taking into consideration all the case laws as mentioned hereinabove, this Court is of the opinion that there must be necessary averments ought to be contained in the complaint before the person can be subjected to criminal-process. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a Company, the principal accused being the Company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirement for making a person liable under the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. Merely being described as a partner in a firm is not sufficient to satisfy the requirement of Section 141. Even a non-partner be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial.
13. In view of this, the petition filed by the petitioners is allowed and the impugned order dated 21-11-2008 passed by III ASJ, Khargone in Criminal Revision Nos. 50/2008 and 40/2008 and the order dated 8-1-2008 passed by CJM, Khargone in Criminal Case No. 27/2008 and order dated 6-12-2007 passed in Case No. 2347/2007 so far as it relates to the petitioners, stands quashed. Copy of the order be placed in the record of M.Cr.C. Nos. 901/2009 and 902/2009.