M/s Magnifico Minerals Pvt Ltd v. Mehta Prashantbhai Mukundray

1. The present petition under Section 482 of the Code of Criminal Procedure has been filed seeking the following prayers: - “In view of stated above, the Petitioners most respectfully prays to this Hon'ble Court may pleased to: - (a) Quash the Complaint Case No 57105 of 2016 dated 10.08.2016 under Section 138 and Section 142 of the NI Act 1881 pending before the Learned Presiding Officer, Special Court (NI ACT) Rouze Avenue Court, New Delhi. (b) Pass any other further order which may deem fit and proper by this Hon'ble Court in the interest of justice.”

2. The present petition arises out of a complaint case being CC NO. 57105/2016 filed by the respondent/complainant against the present petitioner/accused for the offence punishable under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 (for short, ‘NI Act’). The respondent/complainant is Private Limited Company registered under the Companies Act, 1956 and is engaged in business of import and trading of Coal. Petitioner has been arrayed as an accused, in the aforesaid complaint by the respondent, in his capacity as “Proprietor” of M/s Coal Corporation at Trilok Dham Temple Road, Kuber Nagar, Morbi Gujarat. It was alleged, in the said complaint, that the petitioner/accused in discharge of part of admitted legal liability/debt on account of business transactions issued subject cheque in favour of the respondent/complainant. However, when the said cheque was presented by the Complainant for encashment, it was returned unpaid vide return memo dated 30.05.2016 as the payment was stopped by the drawer, accused-petitioner.

3. Thereafter, the petitioner was served with statutory notice in terms of proviso to Section 138 of the NI Act, however, the subject cheque remained unpaid and hence, the aforesaid complaint case was instituted by the respondent/complainant against the petitioner in his capacity as proprietor of M/s Coal Corporation. Learned Metropolitan Magistrate vide order dated 05.07.2016 took cognizance of the offences alleged in the aforesaid complaint and issued summons against the petitioner. Hence, the present petition has been filed seeking quashing of the said complaint case.

4. Learned counsel for the petitioner has submitted that the latter is not the proprietor of M/s Coal Corporation as the same is a Registered Partnership Firm. Attention of this Court has been drawn towards the partnership deed of the said corporation and also, towards the Form-G from the Registrar of Firms wherein, the present petitioner is shown as ‘Partner No. 4’. It is the case of the petitioner that the present complaint case is liable to be quashed on account of the fact that the respondent/complainant has not arrayed the said corporation/partnership firm, i.e., M/s Coal Corporation, as accused. In support of this contention, reliance has been placed on para 16 of Dilip Hariramani v. Bank of Baroda,[1] which reads as under: -

5. Per contra, learned counsel for the respondent/complainant has submitted that it is the petitioner only who had issued the subject cheque on behalf of M/s Coal Corporation in discharge of their legal liability towards the complainant. It is further submitted that the legal demand notice in terms of proviso to Section 138 of the NI Act was sent to the present petitioner and in response to the same, the petitioner had replied wherein the aforesaid ground of the corporation/partnership not being arrayed as accused was not taken. It is further the case of the respondent that, in fact, the petitioner had replied to the said legal demand notice in the same capacity in which he was arrayed as accused in the complaint, i.e., Proprietor of M/s Coal Corporation. It is further submitted that the case is pending before the learned Trial Court for crossexamination of the complainant’s witness and therefore, the complaint cannot be quashed, at this stage, solely on the aforesaid ground.

6. Heard learned counsel for the parties and perused the records.

7. In the complaint filed by the respondent/complainant, it is their case that the petitioner had issued the subject cheque in their favour on behalf of M/s Coal Corporation, which is proprietorship concern, as its proprietor in discharge of part of admitted legal liability/debt incurred on account of business transactions.

8. The ground that the primary offender, i.e., M/s Coal Corporation, is partnership concern and has not been impleaded as accused in the complaint filed by the respondent/complainant was not taken by the petitioner in his reply to the legal demand notice. In reply to the legal demand notice under proviso to Section 138 of the NI Act, the petitioner had responded in the same capacity in which he was arrayed as accused in the complaint, i.e., Proprietor of M/s Coal Corporation. The relevant portion of the reply to the said legal demand notice read as under: - “Your Registered Notice Dt.6-5-2016 but served on 21th May issued on behalf of your client M/s Magnifico Minerals Pvt. Ltd., New Delhi to my client Mr. Prashantbhai Mehta, Pro. of M/s Coal Corporation, Morbi is placed in my hands to give you the following reply Notice as follow:”

9. It is well settled law that a sole proprietor firm has no separate identity and the sole proprietor will be responsible for the same. The Hon’ble Supreme Court in Raghu Lakshminarayanan v. Fine Tubes,[2] had observed and held as under: -

description, so far as a firm is concerned, the same would carry the same meaning as contained in the Partnership Act.”

10. Reliance placed by the learned counsel for the petitioner on Dilip Hariramani (supra) is misplaced as the facts of the said case are distinguishable from the present case. In Dilip Hariramani (supra), the subject cheque on behalf of a partnership firm was not issued by the appellant therein and during the course of trial in the said case, it had come on record that the prosecution was not able to show and establish that the appellant therein was in charge of and responsible for the conduct of the affairs of the said firm. Moreover, legal demand notice, in the said case, under NI Act was not issued to the appellant therein. The relevant portion of the observation made by the Hon’ble Supreme Court in Dilip Hariramani (supra) reads as under: -

However, in the present case, the subject cheque has been issued by the present petitioner for M/s Coal Corporation and the statutory legal demand notice dated 03.06.2016 was also sent to the petitioner, the authorised signatory for M/s Coal Corporation, and the trial before the learned Trial Court is still pending. It is pertinent to note that nothing has been placed on record to show that the account from which the subject cheque was issued belong to a partnership firm. In absence of the same and in view of petitioner himself admitting in the reply to the legal demand notice being Proprietor of M/s Coal Corporation, no grounds for interference are made out at this stage. The petitioner will have ample opportunity to demonstrate that subject cheque was issued by partnership firm as claimed during the course of trial.