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TMI Blog2023 (3) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... steel building for its showroom and workshop project in Hardoi, Uttar Pradesh. 4. Pursuant to the acceptance of the proposal, the revised purchase order dated 10.05.2019 was issued and accepted after which further bills and invoices were also raised by the complainant on 18.05.2019 for a total sum of Rs.1,24,19,840/-. It is alleged that after sending numerous reminders to the accused company, on 23.05.2019, the authorised representatives of the accused company had visited the factory of the complainant in-order to check the material as prepared by the complainant and were satisfied with the work done by the complainant and the same was also mentioned in the minutes of meeting which were shared with the accused company. After numerous reminders and follow ups with the accused company, the accused no. 2 (partner), on 07.06.2019 agreed for releasing part payment for their debt and released an amount of Rs. 50,00,000/- through RTGS and towards the balance payment of Rs. 74,19,840/- the complainant was asked to present two out of the three post-dated cheques given earlier, amounting to a sum of Rs 25,00,000/- (Rupees Twenty Five Lakhs Only) bearing cheque no. 025212 and Rs. 36,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2020 and cheque bearing no. 025213 dated 02.09.2020 along with legal cost. True Copy of the legal notice dated 29.09.2020 sent from the Complainant to all the Accused is annexed in the list of documents and marked as Exhibit CW-__. 28. That the said legal notice was duly delivered to the Accused no. 1, Accused no. 2 and Accused no.3 on 05.10.2020 and the Accused no. 1, Accused no. 2 and Accused no.3 have failed to make payment of their legal and legitimate dues even after receipt of the said legal notice. Original postal receipts along with the tracking record is annexed in the list of documents and marked as Exhibit CW- ____(Colly). 29. That the Accused no. 1, Accused no,2 and Accused no.3 herein replied to the said legal notice of the Complainant through their Counsel vide reply dated 21.10.2020. It is most respectfully stated that the Accused no. 1, Accused no.2 and Accused no.3 in its reply to the legal notice have failed to admit to their liability of Rs. 61,00,000/- for which the Accused no. 1 had issued two cheques bearing no. 025212 and 025213 in favour of the Complainant. True copy of the Reply to the Legal Notice dated 21.10.2020 is annexed in the list of documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be satisfied: i) that the cheque is drawn by a person and on an account maintained by him with a banker; ii) for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and iii) the said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit; of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account. Therefore, a person who is the Signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned By the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than aperson who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat sufficient averments should be made to show that the person who is sought to be proceeded against on the premise of his being vicariously liable for commission of an offence by the Company must be in charge and shall also be responsible to the Company for the conduct of its business." 12. It is, thus, settled that the complainant has to make specific averments as are required under the law in order to hold the accused vicariously responsible for the offence. 13. This Court in the case of Sudeep Jain v. ECE Industries Ltd.: 2013 SCC OnLine Del 1804, with a view to ensure that the provision is not misused, has also laid down certain guidelines for the Magistrates dealing with the complaints under Section 138, read with Section 141 of the NI Act. It was held as under: "10. With a view to ensure that the Metropolitan Magistrates dealing with the complaint cases filed under Section 138 r/w Section 141 of the Negotiable Instruments Act have a clear and complete picture of the persons arrayed by the complainant so as to hold them vicariously liable for the commission of the offence by the accused company, I am inclined to direct that the Magistrates must seek copies of Form- 32 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rised signatory. It is not disputed that the Petitioner is not an authorised signatory. The cheques were also stated to have been handed over by Mr. Gunjan Jain. The only allegation levelled against the petitioner is that she had participated in the negotiations along with Mr. Gunjan Jain and was also responsible for conduct of the business. 17. The only averment in the complaint is that the accused company was working through the petitioner (Ridhima Jain). It is, however, not mentioned that in what capacity, the petitioner was working in the said company (partnership). As noted above, the petitioner is neither the partner nor is alleged to be an employee of the partnership responsible for the conduct of the business of the said partnership firm. 18. The petitioner is, admittedly, the wife of Mr. Gunjan Jain, who is the partner in the accused firm, M/s Swift Construction Expert. There is, however, no manner of doubt that on the date when the alleged offence was committed by the company, the petitioner was not a partner and had nothing to do with the affairs of the partnership firm. 19. The Hon'ble Apex Court, in somewhat similar circumstances, where the petition was filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque. 11. Now, so far as the case on behalf of the original complainant that the appellant herein-original accused 2 can be convicted with the aid of Section 141 of the NI Act is concerned, the aforesaid has no substance. 12. Section 141 of the NI Act is relating to the offence by companies and it cannot be made applicable to the individuals. The learned counsel appearing on behalf of the original complainant has submitted that "company" means any body corporate and includes, a firm or other association of individuals and therefore in case of a joint liability of two or more persons it will fall within "other association of individuals" and therefore with the aid of Section 141 of the NI Act, the appellant who is jointly liable to pay the debt, can be prosecuted. The aforesaid cannot be accepted. Two private individuals cannot be said to be "other association of individuals". Therefore, there is no question of invoking Section 141 of the NI Act against the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (III) A mere association of a person with the accused will not make the person vicariously liable for any act of the accused. (IV) It is not denied that the petitioner is neither the partner in the accused company nor is the signatory of cheque. 22. It is a settled law that the powers of quashing should be used sparingly, and where the factual matrix in a complaint are laid down clearly and not in a routine manner where bald and unspecified averments are made against the accused persons, the complaint ought not to be quashed. However, where ingredients of an offence are lacking against an accused, it is the duty of the Court to discharge such accused. Holding a Trial against the petitioner under Section 138 read with Section 141, is utmost abuse of the process of law and the Learned Trial Court has passed the summoning order without any application of mind. There was no material on record or any averment made in the complaint for the Ld. Magistrate to record the following: "Perusal of the record shows that accused no.1 is a partnership firm and accused no. 2 and 3 are the partners of accused no. 1...." 23. In view of the above, the present petition is allowed and the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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