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TMI Blog2025 (4) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... oan amounting to Rs. 26 lakhs to meet the urgent business requirement and accordingly said loan was given by the complainant through RTGS on 2nd August, 2018 to the accused persons. It was agreed to be compensated by way of paying interest at the rate of 14% per annum payable quarterly. 3. Complainants further case is that the accused persons paid interest for two quarters and thereafter the accused persons towards full and final relinquishment, issued a cheque being no. 982918 dated 01.01.2021 amounting to Rs. 26 lakhs drawn on Axix Bank Ltd., to the complainant concerned but the said cheque on presentation was dishonoured on the ground of "fund insufficient". It has also been stated that the said cheque bears the signature of accused no.2 namely one Manish Kakrania, being the partner and the then authorised signatory. Thereafter, a notice under section 138(b) of the N.I. Act was issued by the complainant company to the accused persons on 22.04.2021, demanding the alleged enforceable debt and after waiting the stipulated period of the 15 days, when the cheque amount was not paid, the complainant initiated the abovementioned complaint case under section 138 of the N.I. Act. 4. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that no where it has been stated that the petitioner was responsible for the day to day business, which is a must to get a relief on the ground of vicarious liability. 8. Accordingly it has been submitted on behalf of the petitioner that the opposite party/complainant has implicated the present petitioner in the said proceeding with an ulterior motive to harass, humiliate and pressurize the petitioner knowing the fact that the petitioner was unaware about the loan transaction and the cheque in question was issued at the behest of Manish Kakrania/accused no.2. Accordingly the petitioner has prayed for quashing the entire proceeding qua the petitioner herein Dipanjan Bhattacharya. 9. Mr. Achin Jana learned Counsel appearing on behalf of the opposite party opposed the prayer made on behalf of the petitioner and contended that in the present case, present petitioner is one of the designated partners of the LLP since its inception. Therefore, by virtue of his post as designated partner of the LLP, he is vicariously liable under section 141 of the N.I. Act for the commission of the offence, since a designated partner in an LLP is deemed to be in charge of and responsible to the LL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e management of the LLP and who under the Companies Act, the "key managerial person" under section 2(51) of the Companies Act 2013. It includes a manging director of a company and in an LLP it is the designated partners who by virtue of their post, act as the official representative of the LLP. He emphasised the role of designated partner by saying that they are more fundamental than that of ordinarily partner, because an LLP can exists without ordinarily partner but it cannot exist without at least two designated partners and under section 7(3) of the Limited Liability Partnership Act, 2008 (in short LLP Act) the designated partners are required to give a written consent prior to being appointed to such post and therefore they stand on a higher pedestal than that of the ordinary partners. He accordingly argued that in the instant case the LLP agreement clearly reveals that the petitioner herein being one of the designated partners was actively taking part as an integral part of the management and administration of the LLP. In this context he referred clause 44 to 47 of the LLP agreement under the heading "Management and Administration of the LLP's Business". He pointed out clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the responsibilities and penal liabilities of a designated partner can also be found enumerated in other provisions of the Act, like section 25, 60, 62 etc. of the LLP Act. He also submitted that it is true that section 10 of the LLP Act has been recently amended with effect from 01.04.2022, whereby contravention of section 8 has been omitted but in the instant case, the offence committed in the year 2021 and as such the argument of the petitioner with regard to the omission of the reference of section 8 in the heading of section 10 is of no use. 16. In this context he further contended that section 26 of the LLP Act, 2008 stipulates that every partner is an agent of the LLP and accordingly any authorized act done by that partner in due course of the business of the LLP will invariable bind the LLP with vicarious liability. 17. Mr. Jana also taken help from the Insolvency and Bankruptcy Code, 2016 which has been enacted after LLP Act of 2008 was introduced and section 32 A of the said Code of 2016 lays down provision to protect investors from the impact of offences committed by a corporate debtor before the corporate insolvency resolution process begins. Said section 32A states ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge of and responsible to the company for the conduct of it's business. The reference in this context that the requirement of the section 141 of the N.I. Act is mandatory and that there is no deemed liability of a director can be traced in SMS Pharmaceuticals ltd. (Supra) Ashok Shewakramani and others Vs, State of Andhra Pradesh reported in (2023) 8 SCC 473, Siby Thomas Vs. Somany Ceramics Limited reported in (2024) 1 SCC 348, Susela Padmavathy Amma Vs. Bharti Airtel Limited reported in 2024 SSC OnLine SC 311. 21. Judging on the aforesaid calibrated scale as set up by the Apex court in the abovementioned judgments, in the impugned complaint, it is true that the complaint does not state that the petitioner herein, i.e. accused no.3 was responsible to the day to day business affairs of the LLP, but in paragraph 3, it is stated that petitioner herein along with other accused persons are the key persons responsible for the management of accused no. 1. 22. However, there is no quarrel with the proposition of law as laid down in SP Mani's Case (supra) that it is not necessary to reproduce the language of section 141 verbatim in the complaint, since the complaint is required to be rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kground is completely different. When the demand notice was sent to the accused persons, the present petitioner had given a reply to the said demand notice on June, 10 2021, wherein petitioner has specifically stated certain facts denying the liability of the present petitioner. For better understanding the situation, the reply given by the petitioner herein may be reproduced below:- Mr. Shiw Kumar Sharda Advocate 161/1, M.G. Road 3rd Floor, Room No. 64 Kolkata 700007 Mobile No. - Illegible Dear Sir, Re: Purported Notice dated April 22, 2021 Your Client: Shantilal Jain & Sons HUF Our Client: (1) Prakriti Eminent Heights LLP and (2) Mr. Dipanjan Bhattacharjee. Our clients above named have received the subject notice on 27.04.2021 and have handed over the same to us with instructions to reply thereto in the manner following:- At the outset, we state that your client has not posted you with the true and correct facts and circumstances of the case. As such, the subject notice is infirm, untenable, vexatious, frivolous and harrasive to our clients. The said purported notice lacks necessary ingredients contemplated under law to constitute the same. Sometime in or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred the same to two LLPs - Onex Projects LLP and Retain Tradelink LLP - both entities controlled by Manish Kakrania and his family members, having no iota of commonality with Prakriti Eminent Heights LLP. Our clients reposed complete trust, faith and confidence upon the said Manish Kakrania. It is now revealed that the said Manish Karania had mis-utilized his position and entered into a financial transaction for his personal gain and enrichment and not for the benefit of the firm. Such transaction was also beyond the knowledge off the other partners. It is thus apparent that the alleged amount of Rs. 26,00,000/- was obtained by Manish Kakrania, for his personal gains and motives, from your client, behind the back of our clients. Our clients, at no point of time, sanctioned the taking of such alleged loan, neither was the same taken on account of the LLP, nor to finance any business of the LLP. Our clients had absolutely no knowledge of the alleged loan transaction, and as such the question of issuing any cheque in repayment thereof does not and cannot arise. In fact, the instrument in question was also issued by Manish Kakrania, and has not been signed by our client Mr. Dipa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thdraw the notice under reference, forthwith upon receipt of the instant reply. Should your client persist in instituting vexatious proceedings against our clients, our clients shall be constrained to defend the same at the cost and consequence of your client." (emphasis added) 26. In the aforesaid background it cannot be said that mere mentioning in the complaint that the petitioner is the key person responsible for the management of the accused no.1 and thereby is jointly and severally liable for the offence under section 138/141 of the N.I. Act in the complaint, is sufficient compliance of section 141 of N.I Act. 27. When clause 41C and 73 of the LLP agreement stipulates that a partner of the LLP agreement can borrow a loan in the name of the LLP only upon written consent of the LLP/other partners, it was required to be averred as to whether the consent of the petitioner herein was taken or not in the context of his specific denial in the reply. Clause 41(g)(k) of the agreement specially mandates that the entire loan borrowed in the name of LLP must be approved by Mr. Kakrania and Mr. Baid, then how the petitioner can be fastened with the allegations levelled in the complaint. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action, discarding the reply as underlined above. 29. In a series of Judgements there is unanimous of judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A clear case should be spelled out in the complaint against the person sought to be made liable. In this context paragraph 20 of the SMS Pharmaceuticals Ltd. Vs. Neeta Bhalla and another reported in (2007) 4 SCC 70 may be quoted. "20. The liability of a Director must be determined on the date on which the offence is committed. Only because Respondent 1 herein was a party to a purported resolution dated 15-2-1995 by itself does not lead to an inference that she was actively associated with the management of the affairs of the Company. This Court in this case has categorically held that there may be a large number of Directors but some of them may not associate themselves in the management of the day-to-day affairs of the Company and, thus, are not responsible for the conduct of the business of the Company. The averments must state that the person who is vicariously liable for commission of the offence of the Company both was in charge of and was res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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