TMI Blog2020 (2) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... rties, and in the absence of any personal knowledge, he cannot depose. The proceedings initiated under Section 14 of the Code noway affects the continuation of the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881. Petition dismissed - decided against petitioner. - Crl.O.P.(MD).Nos.22815 and 22816 of 2018 And Crl.M.P.(MD)Nos.10775, 10776, 10777 and 10778 of 2018 - - - Dated:- 22-8-2019 - Mr. Justice V. Bharathidasan For the Petitioner : Mr.S.Sundaresan For the Respondent : Mr.AR.L.Sundaresan, Senior Counsel, For Mr.Chamundi Bose COMMON ORDER Both the Criminal Original Petitions have been filed to quash the private complaints filed under Section 138 of the Negotiable Instruments Act, 1881. 2. Since the petitioner and the respondents are one and the same, both the petitions have been heard together and disposed of by this common order. 3. The petitioner is the second accused in both the cases. The first respondent herein filed two private complaints, on the ground that, the first accused in this case, namely M/s.Surana Corporation Limited, is a Company, and the petitioner herein is the Managing Director of the first accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Managing Partners, and as per Clauses 13 and 14 of the partnership deed, power has been given to both the Managing Partners to jointly initiate legal proceedings both civil and criminal Courts, and also appoint authorized representatives on behalf of the Firm. But, in the instant case, the power of attorney has been given only by one of the Managing Partners, to file the complaint. Hence, the power of attorney itself is not valid, based on the same, the complaint cannot be filed. That apart, the power of attorney did not say anything in the complaint that he has personal knowledge about the transaction between the complainant and the accused. Hence, he is not competent to file the complaint. That apart, there is no specific averment in the complaints that the petitioner is also in-charge of and responsible to the affairs of the first accused company and the petitioner cannot be made vicariously liable. 5. The learned counsel further submitted that there are two Partnership Firms running Jewellery Shops one at Nagercoil and another at Madurai. Both the cheques have been issued only to M/s.Bhima Jewellery at Nagercoil. Now, one of the the complaints has been filed by M/s.Bhima Jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties. In the sworn-in statement given before the Trial Court, he has clearly stated that he is fully aware of the transaction. Whether the power of attorney has a personal knowledge about the transaction, can be decided only during trial and at this stage, that issue cannot be decided. The petitioner herein is one of the Managing Directors of the first accused company, under Section 141 of the Negotiable Instruments Act, 1881, being a Managing Director, the petitioner is responsible for the day-to-day affairs of the company and he cannot escape from his liability. Furthermore, the petitioner has already filed applications in Crl.M.P.Nos.7914 and 10836 of 2016 before the Trial Court to delete himself as the Managing Director of the first accused company, on the ground that, he has already resigned from the company. That applications have been dismissed by the learned Trial Judge, by order dated 15.05.2017 and the order has also become final, now, it is not open to him to contend that he is not liable for the affairs of the company. 9. The learned Senior Counsel further contended that so far as the liability is concerned, it has been clearly mentioned in the complaints that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. Kanchan Mehta [2018(1) SCC 560], contended that the offence under Section 138 of the Negotiable Instruments Act is primarily a civil wrong and the proceedings also compensatory in nature. In the above circumstances, the complainant, being an unregistered Firm, cannot maintain a complaint as per Section 69(2) of the Indian Partnership Act, 1932. But, the issue as to whether the complainant is a registered Firm or not, cannot be decided at this stage, and the above judgment is no way helpful to decide the issue, at this stage. 13. The next contention of the learned counsel appearing for the petitioner is that, there is no proper authorization by the Firms to file the complaints. According to the petitioner, as per the deeds of partnership, there are two Managing Partners for M/s.Bhima Jewellery at Nagercoil, and in respect of M/s.Bhima Jewellery Madurai, there are three Managing Partners, and authorization should be given by all the Managing Partners. Whereas, the present authorizations have been given only by one of the Managing Partners, and it cannot be construed as a valid authorization, based on that, the complaints cannot be filed by the power of attorney. 14. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentatives. As per the above clause, all the Managing Partners have given power, and there is no specific clause in the partnership deeds that all the Managing Partners should jointly initiate legal proceedings and appoint authorized representatives. As per the deeds, both the Managing Partners are empowered to initiate legal proceedings and appoint authorized representatives. In the absence of any such restriction, I am of the considered view that it is sufficient that anyone of the Managing Partners can give authorization. Hence, the contention of the learned counsel appearing for the petitioner, in this regard, cannot be countenanced. 17. Admittedly, both the complaints have been filed through a power of attorney, by name G.Veeraputhiran, who was the Internal Auditor of the complainant Firms. Now, the contention of the petitioner is that, the power of attorney did not spell out whether he has any personal knowledge about the transaction between the parties and in the absence of any personal knowledge, he is not competent to file the complaint. It is a settled law that a power of attorney holder can file a complaint, appear and depose for the purpose of issuance of process fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all those materials, the learned Magistrate has now taken cognizance of the offence and also issued summons. Whether the power of attorney has any personal knowledge regarding the transaction between the parties, can be ascertained only during the trial. At the stage of taking cognizance and issuing process, the learned Magistrate can go only by the contents of the complaint and also the sworn-in statement or the affidavit filed by the power of attorney along with the complaint. Now, based on those materials, cognizance has been taken and summons issued. Whether the power of attorney has personal knowledge about the transaction, and he is competent to depose, is a matter to be considered at the time of trial. On that ground, the complaints cannot be quashed at this stage. 19. The next serious contention raised by the learned counsel appearing for the petitioner is that, there are two separate partnership Firms. The Jewellery shop at Nagercoil is being run by the Partnership Firm, viz., M/s.Bhima Jewellery. Whereas, Madurai Jewellery Shop is being run by M/s.Bhima Jewellery Madurai. Both the cheques have been issued in favour of M/s.Bhima Jewellery, Nagercoil and there is no lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner, It is settled law that the petitioner, being the Managing Director of the first accused company by virtue of his position, he is responsible to the affairs of the company. There is no necessary to make any specific averment in the complaint. 23. In National Small Industries Corporation Limited v. Harmeet Singh Paintal Another [2010 (3) SCC 330], the Hon'ble Supreme Court has clearly held that if the accused is the Managing Director or Joint Managing Director, then it is not necessary to make specific averment in the complaint and by virtue of their position, they are liable to be proceeded with. The relevant portion of the judgment reads as follows: 25(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issed by the Trial Court. Now, it is not open to him to contend that he is no way responsible for the affairs of the company. 26. The learned counsel appearing for the petitioner further contended that, the first accused company now underwent a liquidation and a proceedings under Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as 'the Code'] is pending against the company, the Adjudicating Authority also passed an order declaring moratorium for prohibiting the institution of suits or other proceedings against the company under Section 14 of the Code. Hence, the complainant cannot maintain a complaint under Section 138 of the Negotiable Instruments Act, 1881, against the petitioner. 27. For considering the above submission, it is useful to refer to Section 14 of the Code, which reads as follows: 14.Moratorium.- (1) Subject to provisions of subsections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, realization of the assets and discharge of liabilities of the Company. Hence, the proceedings under section 138 of N.I. Act, which are in the nature of a criminal complaint and not directly against the assets of the Company, cannot be included in the terms suit or other legal proceedings , as used in section 446(1) of the Companies Act. 30. Following the aforesaid judgment, a learned Single Judge of Bombay High Court, while considering a similar issue, in Tayal Cotton Pvt. Ltd., Aurangabad vs. State of Maharashtra reported in 2019(1) Mh.L.J. 312 , has held as follows: 12. As can be seen from Clause (a) of subsection (1) of section 14 of the Code, once the adjudicating authority declares moratorium for prohibiting institution of suits or continuation of pending suits or proceeding against the corporate debtor including execution of any judgment, decree or order in any Court of law, Arbitration Tribunal or other authority, the whole emphasis of the arguments of the learned advocate for the respondents 2 to 7 is on the words 'proceedings', 'order' and 'in any Court of law'. It has been submitted that these words do not precisely restrict its op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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