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2024 (3) TMI 398 - HC - Indian LawsDishonour of Cheque - Seeking setting aside of summoning order - vicarious liability on partner of a firm - requirements of Section 141 of the NI Act, satisfied or not, especially in view of the fact that in a previous complaint between the same parties, with respect to the same subject matter, the present petitioner was not named as an accused (as a person in-charge of conduct of day to day affairs of the accused partnership firm). HELD THAT - In the present case as noted hereinabove, the allegation with respect to the present petitioner is to the extent that she alongwith with other accused in the said complaint were partners of the partnership firm and are responsible for the day to day affairs of the Accused No. 1 and are incharge and in control and management of the Accused No. 1 . A further reading of the complaint reflects that the subject matter of the same was a Development Agreement dated 16.03.2018 for developing a land owned by respondent no. 2. It is an admitted case that the said agreement has not been signed by the present petitioner. It is a matter of record that respondent no. 2, in the previous complaint filed on the basis of said Development Agreement did not implead the present petitioner as an accused. The name of the petitioner is conspicuously not mentioned as an accused or a person responsible for the affairs of the said partnership firm. In the complaint that is the subject matter of the present petition, no averment has been made by respondent no. 2, to state that the petitioner, although not named in the previous complaint but on account of some subsequent development, came to know that she was incharge of affairs and also responsible for conduct of business of the accused partnership firm at the relevant time. In view of the fact that the previous complaint did not name the present petitioner, it was incumbent upon respondent no. 2 to place on record more particulars about the role of the present petitioner in the complaint. The petitioner is admittedly a 65 years old lady and the accused partnership firm is a family concern. The reliance placed by respondent no. 2 on Income Tax Returns for the financial year 2015-16, filed under the signatures of the petitioner cannot bring her case within Section 141 of the NI Act. As held in SIBY THOMAS VERSUS M/S. SOMANY CERAMICS LTD. 2023 (10) TMI 487 - SUPREME COURT it is be shown that the petitioner was responsible for the affairs of the partnership and in control of the same for the relevant transaction, .i.e., present cheques in question which are dated 27.07.2018 and 05.08.2018. Admittedly, the petitioner is not a signatory to the cheque. Apart from the above basic averment, nothing has been placed on record to show the petitioner s involvement in the firm or with respect to the subject transaction. The summoning order dated 25.07.2019, arising out of CC No. 344/2019, qua the petitioner, is hereby quashed - petition allowed.
Issues Involved:
1. Validity of summoning order dated 25.07.2019. 2. Allegations against the petitioner under Section 138 of the Negotiable Instruments Act, 1881. 3. Petitioner's involvement in the day-to-day affairs of the partnership firm. 4. Applicability of Section 141 of the NI Act to the petitioner. Summary: Issue 1: Validity of Summoning Order Dated 25.07.2019 The petition under Section 482 of the Code of Criminal Procedure, 1973, sought to set aside the summoning order dated 25.07.2019 and quash CC No. 344/2019 under Section 138 of the Negotiable Instruments Act, 1881, pending before the Metropolitan Magistrate, Patiala House Courts, New Delhi. Issue 2: Allegations Against the Petitioner Under Section 138 of the NI Act The complaint was filed against four accused, including the petitioner, alleging that the accused firm issued cheques towards a liability of Rs. 3,02,00,000/-, which were dishonored due to insufficient funds. Despite a legal notice, the payment was not made, leading to the filing of the complaint under Section 138 of the NI Act. Issue 3: Petitioner's Involvement in the Day-to-Day Affairs of the Partnership Firm The petitioner argued that she never issued or signed the cheques and was not involved in the transactions. It was submitted that she was not named in a previous complaint regarding the same subject matter, indicating her lack of involvement. The petitioner claimed that her inclusion in the complaint was to exert pressure on other partners. Issue 4: Applicability of Section 141 of the NI Act to the Petitioner The court examined whether the complaint met the requirements of Section 141 of the NI Act, which holds partners vicariously liable if they are in charge of and responsible for the conduct of the business. The court noted that the previous complaint did not name the petitioner, and no specific averments were made about her role in the day-to-day affairs of the firm. The court referred to precedents, including Gunmala Sales and Siby Thomas, emphasizing that mere partnership status does not automatically imply involvement in the firm's daily operations. Conclusion: The court found that the petitioner, a 65-year-old lady, was not a signatory to the cheques and lacked specific allegations of involvement in the firm's affairs. The reliance on her signing the firm's Income Tax Returns for 2015-16 was insufficient to establish liability under Section 141 of the NI Act. The court concluded that prosecuting the petitioner would be an abuse of process and exercised its inherent powers under Section 482 of the CrPC to quash the summoning order dated 25.07.2019 against her. Disposition: The petition was allowed, and the summoning order dated 25.07.2019, arising out of CC No. 344/2019, qua the petitioner, was quashed. Pending applications were also disposed of. The judgment was to be uploaded on the court's website and a copy sent to the concerned trial court for compliance.
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