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TMI Blog2024 (3) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to clear the total dues of Rs. 3,02,00,000/- (Rupees Three Crore and Two Lakh). iii. Towards discharge of the aforesaid liability, the accused firm issued various cheques in favour of the respondent no. 2, including cheque no. 051067 dated 27.07.2018 for a sum of Rs. 39,21,652/- and cheque no. 051102 dated 05.08.2018 for a sum of Rs. 34,90,696/-. iv. The said cheques were presented at State Bank of India, Connaught Place and was returned unpaid on the ground of funds insufficient , vide return memos dated 24.10.2018. v. On 20.11.2018, the respondent no. 2 sent a legal notice dated 19.11.2018 to the accused firm, calling upon them to clear the dues of the cheque amount. However, the payment was not made. vi. Accordingly, the complaint under the notice 138 of the NI Act was filed on 04.01.2019. vii. The learned Metropolitan Magistrate passed the impugned summoning order dated 25.07.2019, thereby summoning the accused persons including the present petitioner to face trial in the complaint case. viii. On receipt of the said summons, the petitioner moved an application dated 07.05.2022 seeking discharge from the case. The said application was dismissed by the learned Metropolitan Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the principal entity, 8. Learned counsel for respondent no. 2, has placed on record, alongwith the reply to the present petition, copies of Income Tax Returns of the year 2015-2016 filed by the accused partnership firm, i.e., M/s Shreeram Developers to demonstrate that the same were filed under signatures of the petitioner, in her capacity as a partner. It is submitted that the petitioner was not named as an accused in the previous complaint on account of an oversight and the same would not give her any benefit in the subject proceedings. It is pointed out that necessary averments with respect to the petitioner in terms of Section 141 of the NI Act have been made in the complaint. 9. Learned counsel for respondent no. 2 places reliance on the following judgments: i. N. Rangachari v. Bharat Sanchar Nigam Ltd., (2007) 5 SCC 108 ii. Shree Raj Travels Tour Ltd. Ors. v. Destination of the World (Subcontinent) Private Limited, 2010 SCC OnLine Del 3358, iii. Fipola Retain India Pvt. Ltd. v. M2N Interiors, 2022 SCC OnLine Mad 3065; iv. S.P. Mani and Mohan Dairy v. Dr. Snehalatha Elangovan, 2022 SCC OnLine SC 1238. 10. Heard learned counsel for the parties and perused the record. 11. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in control and management of the Accused No. 1. 3. That the Accused approached the Complainant and entered into a Development Agreement dated 16.03.2018 to develop the land owned by the Complainant. The said Development Agreement was executed through Sh. Ashok Aggarwal, Partner and all the terms and conditions were incorporated in the said agreement. 14. The issue before this Court is whether the aforesaid averments satisfy the requirements of Section 141 of the NI Act, 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). 15. The Hon ble Supreme Court, in S.P. Mani (supra), has held as under: Specific averments in the complaint 51. In Gunmala Sales [Gunmala Sales (P) Ltd. v. Anu Mehta, (2015) 1 SCC 103 : (2015) 1 SCC (Civ) 433 : (2015) 1 SCC (Cri) 580], this Court after an exhaustive review of its earlier decisions on Section 141 of the NI Act, summarised its conclusion as under : (SCC pp. 126-27, para 34) 34. 34.1. Once in a complaint filed under Section 138 read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depends upon the facts and circumstances of each case. The High Court at that stage does not conduct a mini trial or roving inquiry, but nothing prevents it from taking unimpeachable evidence or totally acceptable circumstances into account which may lead it to conclude that no trial is necessary qua a particular Director. 52. The principles of law and the dictum as laid in Gunmala Sales [Gunmala Sales (P) Ltd. v. Anu Mehta, (2015) 1 SCC 103 : (2015) 1 SCC (Civ) 433 : (2015) 1 SCC (Cri) 580], in our opinion, still holds the field and reflects the correct position of law. *** *** *** 58. Our final conclusions may be summarised as under: 58.1. The primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no legal requirement for the complainant to show that the accused partner of the firm was aware about each and every transaction. On the other hand, the first proviso to sub-section (1) of Section 141 of the Act clearly lays down that if the accused is able to prove to the satisfaction of the Court that the offence was committed without his/her knowledge or he/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his/her contention. He/she must make out a case that making him/her stand the trial would be an abuse of process of Court. Further, the Hon ble Supreme Court, in Siby Thomas v. Somany Ceramics Ltd., (2024) 1 SCC 348 , after interpreting S.P. Mani (supra), observed and held as under: 12. Bearing in mind the afore-extracted recitals from the decisions in Gunmala Sales [Gunmala Sales (P) Ltd. v. Anu Mehta, (2015) 1 SCC 103 : (2015) 1 SCC (Civ) 433 : (2015) 1 SCC (Cri) 580] and S.P. Mani case [S.P. Mani Mohan Dairy v. Snehalatha Elangovan, (2023) 10 SCC 685 : (2024) 1 SCC (Cri) 203], we have carefully gone through the complaint filed by the respondent. It is not averred anywhere in the complaint that the appellant was in charge of the conduct of the business of the company at the relevant time when the offence was committed. What is stated in the complaint is only that Accused 2 to 6 being the partners are responsible for the day-to-day conduct and business of the company. It is also relevant to note that an overall reading of the complaint would not disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reject the complaint at the threshold if he finds that there is no sufficient ground for proceeding. Thus, if this basic averment is missing the Magistrate is legally justified in not issuing process. But here we are concerned with the question as to what should be the approach of a High Court when it is dealing with a petition filed under Section 482 of the Code for quashing such a complaint against a Director. If this averment is there, must the High Court dismiss the petition as a rule observing that the trial must go on? Is the High Court precluded from looking into other circumstances, if any? Inherent power under Section 482 of the Code is to be invoked to prevent abuse of process of any court or otherwise to secure ends of justice. Can such fetters be put on the High Court's inherent powers? We do not think so. 29. SMS Pharma (1) [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005 SCC (Cri) 1975], undoubtedly, says that it is necessary to specifically aver in the complaint that the Director was in charge of and responsible for the conduct of the company's business at the relevant time when the offence was committed. It says that this is a basic req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven case on an overall reading of a complaint and having come across some unimpeachable evidence or glaring circumstances come to a conclusion that the petition deserves to be allowed despite the presence of the basic averment. That is the reason why in some cases, after referring to SMS Pharma (1) [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005 SCC (Cri) 1975], but considering overall circumstances of the case, this Court has found that the basic averment was insufficient, that something more was needed and has quashed the complaint . *** *** *** 35. We will examine the facts of the present case in the light of the above discussion. In this case, the High Court answered the first question raised before it in favour of the respondents. The High Court held that in the complaint except the averments that the Directors were in charge of and responsible to the Company at the relevant time, nothing has been stated as to what part was played by them and how they were responsible regarding the finances of the Company, issuance of cheque and control over the funds of the Company . After so observing, the High Court quashed the proceedings as against the respondents. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. As highlighted hereinabove, respondent no. 2 makes an averment with respect to other accused persons who are partners, as being incharge of affairs of the accused partnership firm. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and his family members being a old lady .... wherein the petitioner is mentioned as 'his' instead of 'her' which is an understandable and human error. D. The contents of Para No. D of the Petition are wrong and hence denied. It is specifically denied that the their exist no privity of contract between the Petitioner and the answering Respondent. It is submitted in this regard that the agreement as stated by the Petitioner was entered between the Partnership concern wherein the Petitioner is one of the Partner and M/s Sesame Foods Pvt Ltd. in whose favour the cheque in question was issued by the Partnership concern. 19. 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 (supra) 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. Admi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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