Negotiable Instruments Act, 1881 – Ss. 138 & 142 – Cheques issued from their individual accounts and not from the accounts maintained by the Partnership Firm – In such case, the Partnership Firm is not at all a necessary party to be arraigned as an accused in the complaint – If Partnership Firm is arraigned as the accused in this case, the complaint itself will not be maintainable simply because of the fact that the cheque in question was not one issued from the account maintained by the Partnership Firm.
2016 (3) KLT 696 : 2016 (4) KHC 296
IN THE HIGH COURT OF KERALA AT ERNAKULAM
B. KEMAL PASHA, J.
Crl. Appeal No. 1201 of 2009
Dated this the 4th day of August, 2016
STC 989/2008 OF CHIEF JUDICIAL MAGISTRATE COURT, PALAKKAD
BY ADVS.SRI.P.VIJAYA BHANU SRI.M.REVIKRISHNAN
1. C.K.MUKUNDAN, AGED 45 YEARS, S/O.SANKARAN NAIR, DURGA NIVAS, MUNDUR P.O., PALAKKAD DISTRICT, NOW RESIDING AT E-10, GROUND FLOOR, GREATER KAILASH-1, NEW DELHI-110048.
2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.
R1 BY ADV. SRI.R.SUDHISH SMT.M.MANJU R2 BY PUBLIC PROSECUTOR SMT.MAYA
J U D G M E N T
Precisely, the question to be considered here is whether the Partnership Firm of which the accused before the court below was the Managing Partner had also to be arraigned as an accused to maintain a complaint before the court below filed under
Section 142 of the Negotiable Instruments Act
(for short ‘N.I. Act’) alleging an offence punishable under Section 138 of the N.I. Act?
2. Challenging the judgment of acquittal passed by the Chief Judicial Magistrate’s Court, Palakkad in S.T.Case No.989/2008, the complainant before the court below has come up in appeal. The complainant is a businessman dealing in computers and accessories. He had supplied computers and accessories to the Partnership Firm named ‘Souwbhagya Associates’, Palakkad, of which the accused was the Managing Partner, and one Smt. V.A. Suseela was one of the Partners. In fact, the accused and the said Smt. V.A. Suseela were doing business in the Firm named ‘Souwbhagya Associates’.
3. Through various purchases, an amount of ₹14,32,325/- fell due to the complainant. The accused being the Managing Partner and the said Smt.V.A. Suseela, who was the other Partner of the Firm, had shouldered the responsibility, and took over the liability to discharge the said debt and they issued three cheques to the complainant. The accused issued Exhibit-P1 cheque for ₹5,00,000/- and another cheque for ₹5,00,000/- by undertaking the liability to discharge an amount of ₹10,00,000/- out of the total amount, from his individual account. Smt.V.A.Suseela issued another cheque for the balance amount of ₹4,32,325/-, which was also issued from her individual account.
4. In this particular case, when Exhibit-P1 cheque was presented for collection, the same returned dishonoured for insufficiency of funds in the account of the accused. A demand notice as contemplated under Section 138(b) of the N.I. Act was caused to be issued to the accused in the form of a lawyer’s notice, the copy of which is Exhibit-P4. The said demand notice evoked no response at all, and hence the complaint.
5. On the side of the complainant, PW-1 was examined and Exhibits-P1 to P9 were marked. No defence evidence was adduced. The court below found the accused not guilty of the offence punishable under Section 138 of the N.I. Act, and acquitted him under Section 255(1) Cr.P.C., through the impugned judgment.
6. Heard the learned counsel for the appellant and the learned counsel for the 1 st respondent.
7. The learned counsel for the appellant has argued that the liability in question was taken over by the Managing Partner as well as the other Partner and they have shouldered the responsibility to discharge the debt of the Firm. Apart from that, the cheque in question was one issued by the accused from the individual account maintained by the accused at the Bank, and not one issued from the account of the Partnership Firm. The cheque was not one issued from the account of the Partnership Firm by the accused as one for and on behalf of the Partnership Firm. It is argued that the court below has lost sight of these aspects and has found fault with the complainant in not arraigning the Partnership Firm as an accused. According to the learned counsel for the appellant, the judgment of acquittal passed by the court below is liable to be reversed.
8. Per contra, the learned counsel for the 1 st respondent has argued that the transactions in question were between the Partnership Firm named M/s. Sowbhagya Associates, of which the accused was the Managing Partner, and the complainant, and in such case, the complainant ought to have arraigned the Partnership Firm also as an accused within the meaning of Explanation (a) to Section 141 of the N.I. Act. Therefore, according to the learned counsel for the 1 st respondent, the impugned judgment does not call for any interference at all.
9. In this particular case, it has to be noted that even though the computers and accessories were supplied by the complainant to the Partnership Firm named M/s.Sowbhagya Associates, it is the case of the complainant that the aforesaid 3 cheques were issued by the accused as well as the said Smt.V.A.Suseela to the complainant, in discharge of the whole liability of M/s.Sowbhagya Associates, from the individual account maintained by the accused and the said V.A.Suseela. Admittedly, Exhibit-P1 cheque was not one issued from the account maintained by the Partnership Firm. Exhibit-P1 cheque is not one issued by the accused for and on behalf of the Partnership Firm, from the account maintained by the Partnership Firm. Had it been so, Exhibit-P1 cheque could have been styled as a cheque issued by the Partnership Firm, which necessitates the arraignment of the Partnership Firm as an accused, in order to maintain the complaint.
10. As per Section 141(1) of the N.I. Act, “if the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.” The Explanation to Section 141 says that ‘for the purpose of Section 141, (a) “company” means any body corporate and includes a firm or other association of individuals; and (b) “director”, in relation to a firm, means a partner in the firm.’