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TMI Blog2024 (8) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioners herein, i.e. accused No. 3, 4 & 5 in the Complaint Case. 2. Material on record discloses that M/s Adigear International, which is a partnership firm with the Petitioners herein as its partners, availed a credit facility of Rs.30 crores out of which there is a cash credit facility of Rs. 25 crores and a letter of credit facility of Rs.5 crores from the erstwhile Allahabad Bank (now Indian Bank)/Respondent No. 2 herein. It is stated that the total outstanding dues payable to the Bank by the partnership firm as on 24.12.2013 was Rs.32.84 crores, i.e. Rs.29.57 crores against cash credit facility and Rs. 3.27 crores against letter of credit facility. Material on record discloses that towards regularizing the account of the partnership firm and for partial liquidation of the over drawn amount, the Petitioners herein issued the following cheques drawn on the State Bank of Bikaner and Jaipur in favour of the Allahabad Bank (now Indian Bank): i. No .358077 dated 25.09.2013 for Rs.43,00,000/- ii. No. 358075 dated 28.09.2013 for Rs. 43,00,000/- iii. No. 358076 dated 30.09.2013 for Rs. 44,00,000/- 3. It is stated that when the abovementioned cheques were presented for cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its partners have availed a credit facility of RS.30 Crores out of which there is a cash credit facility of Rs. 25 Crores and a letter of credit facility of Rs. 5 Crores. The accused No .1 maintaining account No.50067526557 with the complainant bank ***** 7. That the accused No. 2 to 5 being the partners of the accused No .1 and the drawers of the aforesaid three dishonoured cheques are liable to pay the amounts of the aforesaid dishonoured cheques to the complainant in cash or by way of demand draft. ***** 10. That the accused has committed offence u/s. 138 to 142 of the Negotiable Instruments Act by issuing a false, wrong, incorrect and vexatious cheques to the complainant and has rendered themselves liable to be prosecuted u/s. 138 to 142 of N.I. Act." 9. Notice in the present Petition was issued on 06.07.2022. Replies, rejoinders and written submissions have been filed by the parties. Partnership deed has also been filed along with the reply wherein it is stated that apart from the Petitioner No. 1 herein, i.e. Ms. Anju Khanna, who is a sleeping partner, all the rest of the partners, i.e. Mr. Sanjay Khanna (Petitioner No. 2 herein), Mr. Sandeep Khanna (Petitioner No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi v. Sangita Rane,17 Himanshu v. B. Shivamurthy, and Hindustan Unilever Limited v. State of Madhya Pradesh. The exception carved out in Aneeta Hada (supra),20 which applies when there is a legal bar for prosecuting a company or a firm, is not felicitous for the present case. No such plea or assertion is made by the respondent." 11. Learned Counsel for the Petitioner also places reliance on the Judgment passed by the Apex Court in Pooja Ravinder Devidasani v. State of Maharashtra, (2014) 16 SCC 1, wherein the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention that the cheques in question were issued by virtue of such letter of guarantee and hence the appellant is liable under Section 138 read with Section 141 of the NI Act, cannot also be accepted in these proceedings. 30. Putting the criminal law into motion is not a matter of course. To settle the scores between the parties which are more in the nature of a civil dispute, the parties cannot be permitted to put the criminal law into motion and courts cannot be a mere spectator to it. Before a Magistrate taking cognizance of an offence under Sections 138/141 of the NI Act, making a person vicariously liable has to ensure strict compliance with the statutory requirements. The superior courts should maintain purity in the administration of justice and should not allow abuse of the process of the court. The High Court ought to have quashed the complaint against the appellant which is nothing but a pure abuse of process of law." 12. Learned Counsel for the Petitioner states that what applies to the Director of a company will also apply to partners of a firm as well. He further states that in the entire complaint there is no specific averment against the Petitioners herein sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is relevant to extract certain Sections of the Partnership Act, 1932. Section 12, which deals with the conduct of the business, reads as under: "Section 12: THE CONDUCT OF THE BUSINESS. Subject to contract between the partners - (a) every partner has a right to take part in the conduct of the business; (b) every partner is bound to attend diligently to his duties in the conduct of the business; (c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners; (d) every partner has a right to have access to and to inspect and copy any of the books of the firm; (e) in the event of the death of a partner, his heirs or legal representatives or their duly authorised agents shall have a right of access to and to inspect and copy any of the books of the firm." 18. Section 13, which deals with mutual right and liabilities of the Partners of a Partnership Firm, reads as under: "Section 13: MUTUAL RIGHT AND LIABILITIES. Subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nging to the firm, or (g) enter into partnership on behalf of the firm." 21. Section 22, which deals with mode of doing act to bind a firm, reads as under: "Section 22. Mode of doing act to bind firm. In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm." 22. Section 23, which deals with effect of admissions by a partner of a firm, reads as under: "Section 23. Effect of admissions by a partner. An admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course of business." 23. Section 25, which deals with liability of a partner for the acts of the firm, reads as under: "Section 25. Liability of a partner for acts of the firm. 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." 24. A perusal of the abovementioned Sections shows that the position of a Partner is distinct from Director of a company. Section 18 of the Partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt in mind by the Court concerned. 42.6. These provisions create a statutory presumption of dishonesty exposing a person to criminal liability if payment is not made within the statutory period even after the issue of notice. 42.7. The power of quashing should be exercised very sparingly and where, read as a whole, the factual foundation for the offence has been laid in the complaint, it should not be quashed. 42.8. The Court concerned would owe a duty to discharge the accused if taking everything stated in the complaint is correct and construing the allegations made therein liberally in favour of the complainant, the ingredients of the offence are altogether lacking." 27. This Court has perused the partnership deed entered into between Ms. Anju Khanna (Petitioner No. 1 herein), Mr. Pran Nath Khanna, Mr. Sanjay Khanna (Petitioner No. 2 herein) and Mr. Sandeep Khanna (Petitioner No. 3 herein) on 25.06.2005. Relevant clauses of the said Partnership Deed reads as under: "2. That the business of the firm shall be carried on under the name and style of M/s Adigear Internationa or such other name or names as the parties any hereinafter from time to time determine. ***** 7. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the requirements of Section 32 of the Partnership Act have been fulfilled or not. Section 32 of the Partnership Act reads as under: "Section 32. Retirement of a partner. (1) A partner may retire- (a) with the consent of all the other partners, (b) in accordance with an express agreement by the partners, or (c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire. (2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement. (3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement: Provided that a retired partner is not liable to any third party who deals with the firm without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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