2021 (2) TMI 114 - HC - Indian Laws

Dishonor of Cheque - Partnership firm - vicarious principle underlying the provisions of section 141 of the Act - Non working Partner was in charge of the affairs of the firm or not - whether the accused is justified in the contention that the partnership deed dated 9.1.2013 is an incontrovertible material as would render the proceedings an abuse of the process of law? - HELD THAT - The answer must be an emphatic no. An incontrovertible material is, ordinarily, a public document in public domain or a private document which is not disputed or is irrefutable. It is not even argued, that the partnership deed is a public document. Be it noted, that according to the accused, the partnership firm is not registered. The partnership deed which is pressed in service to canvas the submission that the accused was not in charge of the affairs of the firm is not a document in public domain - The principle that indubitable material can be looked into in exercise of 482 jurisdiction is too well settled. The expressions used by the Apex Court are indubitable or incontrovertible or irrefutable and the semantic difference apart, the ratio is that the material which is brought to the Court s notice by the accused, must be incontrovertible as would persuade the Court to believe that continuation of the proceedings shall be an abuse of the process of the law. I have already held that a private document like the partnership deed, which is not in public domain, which is not on the record of any statutory authority, and which is specifically disputed, cannot be an indubitable or incontrovertible material. No case is made out for interfering in exercise of inherent powers or in extraordinary jurisdiction. Application dismissed.

Issues Involved:
1. Applicability of Section 141 of the Negotiable Instruments Act, 1881.
2. Inherent power under Section 482 of the Code of Criminal Procedure, 1973.
3. Extraordinary jurisdiction under Section 227 of the Constitution of India.
4. Consideration of the partnership deed as incontrovertible material.
5. Specific allegations in the complaint regarding the accused's role in the firm.

Detailed Analysis:

1. Applicability of Section 141 of the Negotiable Instruments Act, 1881:
The applicant, arraigned as accused 5, challenged the issuance of process under Section 138 of the Negotiable Instruments Act, 1881. The core argument was that the accused was not in charge of the firm's affairs, thus not vicariously liable under Section 141. The complainant countered that the accused was responsible for the firm's business and the offence was committed with his consent or connivance. The court referenced the decision in S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla, emphasizing that necessary averments in the complaint, if accepted at face value, make out a case to proceed against the accused.

2. Inherent Power under Section 482 of the Code of Criminal Procedure, 1973:
The applicant invoked inherent power under Section 482 of the Code to quash the proceedings. The court considered whether the partnership deed dated 9.1.2013 could be deemed incontrovertible material to render the proceedings an abuse of the process of law. The court concluded that the partnership deed did not qualify as incontrovertible material since it was a private document not in the public domain and was specifically disputed.

3. Extraordinary Jurisdiction under Section 227 of the Constitution of India:
The applicant also invoked the extraordinary jurisdiction under Section 227 of the Constitution of India. The court reiterated that the basic averment that the accused was in charge of the firm's affairs was sufficient to issue process. The court noted that further details of the accused's role could be brought out during the trial.

4. Consideration of the Partnership Deed as Incontrovertible Material:
The court scrutinized whether the partnership deed could be considered incontrovertible material. It was determined that an incontrovertible material is usually a public document or a private document that is undisputed. The partnership deed did not meet these criteria as it was neither a public document nor undisputed. The court also noted that the partnership firm was not registered, further undermining the deed's status as incontrovertible material.

5. Specific Allegations in the Complaint Regarding the Accused's Role in the Firm:
The court examined the averments in the complaint, which specifically stated that the accused was in charge of and responsible for the firm's business. The complaint detailed the accused's involvement in the firm's transactions and the issuance of the dishonored cheque. The court referenced Gunmala Sales Private Limited vs. Navkar Infra Projects Private Limited and other precedents to assert that the basic averment in the complaint was sufficient to issue process. The court emphasized that the sufficiency of evidence would be assessed during the trial.

Conclusion:
The court dismissed the application, holding that no case was made out for interfering in the exercise of inherent powers or extraordinary jurisdiction. The partnership deed did not qualify as incontrovertible material, and the averments in the complaint were sufficient to proceed against the accused. The application of legal principles from S.M.S. Pharmaceuticals, Gunmala Sales, and other precedents reinforced the court's decision to allow the trial to continue.

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