2003 (1) TMI 759 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the petitioners are partners of the first accused firm.
2. Whether the mere allegation by the complainant that the petitioners are partners is sufficient to hold them liable.
3. The necessary allegations or averments needed for prosecuting a person under Section 138 of the Negotiable Instruments Act.
4. The maintainability of the revision petition.

Issue-wise Detailed Analysis:

1. Whether the petitioners are partners of the first accused firm:
The petitioners contended that they are not partners of the first accused firm but are the wives of accused Nos. 2, 4, 6, and 8. They produced 'Form-A' from the Office of the Registrar of Firms to substantiate their claim, which indicated that only accused Nos. 2, 4, 6, 8, 11, and one Periyasami (not arrayed as an accused) are partners. The court noted that the complainant failed to produce any material, such as the partnership deed, to substantiate the claim that the petitioners are partners. The court emphasized that the complainant's failure to produce the partnership deed, despite referring to it in the complaint, was significant.

2. Whether the mere allegation by the complainant that the petitioners are partners is sufficient to hold them liable:
The court held that mere allegations without supporting materials are not enough to launch prosecution. The complainant's assertion that the petitioners are partners, without producing the partnership deed or any other substantive evidence, was deemed insufficient. The court stressed that the complainant should have fortified the averment with substantive evidence, especially when the accused had denied being partners at the earliest stage.

3. The necessary allegations or averments needed for prosecuting a person under Section 138 of the Negotiable Instruments Act:
The court referred to Section 141 of the Negotiable Instruments Act, which deals with offenses by companies. It stated that for a person to be liable under this section, there must be specific allegations that the person was in charge of and responsible for the conduct of the business of the company. The court found that the complaint lacked such specific allegations against the petitioners. Additionally, the court noted that the complainant did not produce the partnership deed, which was crucial for establishing the petitioners' liability.

4. The maintainability of the revision petition:
The court addressed the argument that the revision petition is not maintainable as it pertains to an interlocutory order. The court referred to the Supreme Court's decision in Amarnath Vs. State of Haryana, which clarified that orders affecting the rights of the accused or deciding certain rights of the parties are not interlocutory orders and thus are subject to revision. The court concluded that the order in question substantially affected the petitioners' rights and was, therefore, not an interlocutory order. Consequently, the revision petition was deemed maintainable.

Conclusion:
The court quashed the proceedings against the petitioners, holding that the prosecution against them was not maintainable under Section 141 of the Negotiable Instruments Act. The court emphasized the necessity of specific allegations and substantive evidence to hold individuals liable under this section. The revision petition was found to be maintainable as it addressed a final order affecting the petitioners' rights.