2024 (10) TMI 885 - HC - Indian Laws

Dishonour of Cheque - Issuance of summons in the complaint - role of petitioner in the firm's business - respondent seeks dismissal of the petition and submits that the appropriate stage for discharge is before the trial Court and not the inherent jurisdiction of this Court - HELD THAT - It is clear that the petitioner was neither the signatory nor the proprietor of the firm which issued two cheques in question. Before anyone can be summoned to face a criminal trial, the Magistrate must search for primafacie legally admissible evidence, which attributes some role that makes out a penal offense - In the present case, the complainant is silent about the petitioner's role and there is no evidence pointing out the petitioner s criminal liability with the cheque. In Anil Hada v. Indian Acrylic Ltd., 1999 (11) TMI 808 - SUPREME COURT , Hon ble Supreme Court holds ' If the offence was committed by a company it can be punished only if the company is prosecuted. But instead of prosecuting the company if a payee opts to prosecute only the persons falling within the second or third category the payee can succeed in the case only if he succeeds in showing that the offence was actually committed by the company. In such a prosecution the accused can show that the company has not committed the offence, though such company is not made an accused, and hence the prosecuted accused is not liable to be punished. The provisions do not contain a condition that prosecution of the company is sine qua non for prosecution of the other persons who fall within the second and the third categories.' Thus, it is a fit case where the continuation of criminal proceedings shall amount to an abuse of the process of law, and the Court invokes its inherent jurisdiction under section 482 CrPC to quash the summons qua the petitioner and all subsequent proceedings. The summoning orders qua all the petitioners, are quashed and set aside - petition allowed.

Issues Involved:
1. Quashing of summons issued under Section 482 CrPC.
2. Determination of the petitioner's liability under the Negotiable Instruments Act.
3. Examination of the petitioner's role in the firm and the issuance of the cheque.
4. Application of legal precedents regarding partner liability in a firm.

Detailed Analysis:

1. Quashing of Summons Issued under Section 482 CrPC:

The primary issue before the court was whether the summons issued to the petitioner could be quashed under Section 482 of the Criminal Procedure Code (CrPC). The petitioner contended that he had no role in the firm's business and was not the signatory of the cheque in question. The court examined whether there was prima facie legally admissible evidence attributing a role to the petitioner that would constitute a penal offense. It was determined that the petitioner was neither the signatory nor the proprietor of the firm that issued the cheques, as explicitly stated in the complaint. Consequently, the continuation of criminal proceedings against the petitioner was deemed an abuse of the process of law, leading to the quashing of the summons and all subsequent proceedings.

2. Determination of the Petitioner's Liability under the Negotiable Instruments Act:

The court explored whether the petitioner could be held liable under the Negotiable Instruments Act, specifically in the context of the cheque that bounced. The complainant argued that the petitioner was actively involved in the business and therefore liable. However, the court noted that the complaint did not specify the petitioner's role in the issuance of the cheque, nor was there evidence of his criminal liability. Citing precedents, the court emphasized that liability under the Negotiable Instruments Act requires evidence of the petitioner's responsibility for the conduct of the firm's business at the time the offense was committed.

3. Examination of the Petitioner's Role in the Firm and the Issuance of the Cheque:

The court scrutinized the complaint and the response to ascertain the petitioner's involvement in the firm and the issuance of the cheque. The complaint indicated that the cheque was issued by another partner, who was the sole proprietor and authorized signatory. The court found no evidence that the petitioner had any role in the issuance of the cheque or the firm's business activities. The absence of specific allegations against the petitioner in the complaint led the court to conclude that there was no prima facie case against him.

4. Application of Legal Precedents Regarding Partner Liability in a Firm:

The judgment referenced several Supreme Court decisions to determine the liability of partners in a firm. It was highlighted that a partner could be held liable if they were in charge of and responsible for the firm's business at the time of the offense, or if the offense was committed with their consent or connivance. The court applied these principles to the present case, noting the lack of evidence against the petitioner. The court also cited the precedent that prosecution of the company is not a sine qua non for prosecuting individuals, but there must be a finding that the company committed the offense. In the absence of such a finding, the court ruled in favor of quashing the proceedings against the petitioner.

Conclusion:

The court concluded that the continuation of criminal proceedings against the petitioner would constitute an abuse of the process of law. Therefore, it invoked its inherent jurisdiction under Section 482 CrPC to quash the summons and subsequent proceedings against the petitioner. The petitions were allowed, and the summoning orders were set aside. All pending applications were closed in accordance with this judgment.

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