Madan Singh & Anr. v. Vee Pee International Pvt. Ltd. & Ors.

1. The Petitioners invoke the inherent powers of this Court under Section 482 of the Code of Criminal Procedure for quashing of the Complaint under Section 138 of the Negotiable Instruments Act, 1881 (the Act) on the premise that the Petitioners were sought to be prosecuted as Partners of M/s. Dhanlaxmi Fashion whereas infact M/s. Dhanlaxmi Fashion was a Proprietorship Firm. In fact, in the Complaint itself, the firm was prosecuted through its Proprietor/Partner and Respondent No.2 was prosecuted as Proprietor/Partner/Authorized signatory of M/s. Dhanlaxmi Fashion. Thus, although in the title of the Complaint, the Respondent was not sure whether the firm was a Partnership or Proprietorship firm. In Para 3 of the complaint it was averred that M/s. Dhanlaxmi Fashion was a 2013:DHC:1229 Partnership firm and accused Nos. 2 to 5 were its partners and were in charge of and responsible for the conduct of the day to day business of the firm. It was further stated that accused No.2 (not a Petitioner before this Court) was the signatory of the cheque in question and was also, therefore, liable to be prosecuted. Learned counsel for the Petitioners referring to the reply to the notice under Section 251 Cr.P.C. served upon Respondent No.3, stated that M/s. Dhanlaxmi Fashion was a Proprietorship firm and his father Madan Singh and his younger brother Rajender Rajpurohit had nothing to do with the same and further that accused Bharat who was also prosecuted as partner of M/s. Dhanlaxmi Fashion was merely an employee who had left the job.

2. The learned counsel for the Respondents urges that a host of documents were placed before the Trial Court to prove that M/s. Dhanlaxmi Fashion was a proprietorship firm but the same were not taken into consideration. The learned counsel refers to a letter dated 26.10.2010 written by Respondent Mahender Singh Rajpurohit as Proprietor of M/s. Dhanlaxmi Fashion to his Banker, HDFC Bank, Johri Bazar, Jaipur whereby the payment of the cheque in question was stopped. He has placed on record a copy of the notice given by M/s. Dhanlaxmi Fashion to the Inspector of Shops and Commercial Establishments, whereby the Govt. department was notified that the shop will close on Sunday; the registration certificate of the shop M/s. Dhanlaxmi Fashion with the Inspector Shops and Commercial Establishments and the registration certificate issued to M/s. Dhanlaxmi Fashion by Commercial Taxes Officer, Division Kar Bhawan, Jahalana, Jaipur. In all these documents M/s. Dhanlaxmi Fashion has been described as a proprietorship firm.

3. Learned counsel for the Respondents opposes the Petition for quashing the complaint. Relying on Rajesh Agarwal & Ors. v. State & Ors. 2010 (3) JCC (NI) 273; and Krishna Murari Lal v IFCI Factors Ltd. 2013 (1) JCC (NI) 1 he urges that at this stage the averments made in the Complaint have to be accepted on its face value and the Petitioners’ defence, if any, cannot be considered at this stage.

4. Relying on Bhushan Kumar & Anr. v. State (NCT of Delhi) & Anr., Criminal Appeal No.612/2012 decide on 04.04.2012, the learned counsel for the Respondents submits that while taking cognizance, a Magistrate is not expected to give any explicit reason. Referring to State of Orissa v. Debendra Nath Pandhi, Criminal Appeal No.497/2001 decided on 29.11.2004, the learned counsel argues that the documents relied upon by the accused cannot be taken into consideration at the time of framing of the charge.

5. In the case of Rajesh Agarwal, a Coordinate Bench of this Court held that the provisions of summary trial enable the Respondent to lead defence evidence by way of an Affidavit and other documents, thus an accused who considers that he has a tenable defence and the case against him was not maintainable, he can enter his plea on the very first day of his appearance and file an Affidavit in his defence. It is also true that a Magistrate is not required to record detailed reasons while issuing process. It is also true as held in Debendra Nath Pandhi that defence of an accused is not to be taken into consideration at the time of framing of the charge but at the same time when there are documents of sterling character from an authentic source like a Govt. department whose genuineness is not in dispute the same can be considered by the Court particularly in a summons trial and the proceedings can be stayed as provide under Section 258 of the Code.

6. In a latest judgment of the Supreme Court in Rajiv Thapar & Ors. v. Madan Lal kapoor, Criminal Appeal No.174/2013 decided on 23.01.2013 the Supreme Court after referring to the judgment in Debendra Nath Pandhi (relied upon by the learned counsel for Respondent No.1) observed that in its inherent jurisdiction under Section 482 of the Code the High Court can be persuaded to quash such criminal proceedings where the material produced by the accused is such that would lead to the conclusion that his defence is based on sound, reasonable and indubitable facts; material produced is such, as would rule out and displace the assertions contained in the charges leveled against the accused. Para 22 of the report is extracted hereunder:-

7. Turning to the facts of the instance case, I may mention that the complaint under Section 138 of the Act was preferred on 31.01.2011. Respondent No.1 was either not sure whether M/s. Dhanlaxmi Fashion was a proprietorship firm or was a partnership firm or he intentionally tried to create confusion by mentioning M/s. Dhanlaxmi Fashion as a proprietorship/partnership firm. Thus, as stated earlier in the title of the complaint he mentioned M/s. Dhanlaxmi Fashion through its Proprietor/Partner. The genuineness of the documents filed by the Petitioners, particularly, the documents issued by Shops and Commercial Establishments Department and Commercial Tax Officers, Jaipur were not disputed by the Respondents.

8. In Shri Raj Chawla v. Securities & Exchange Board of India (SEBI) & Anr. Crl.M.C.3937/2009 decided on 12.01.2010, a Coordinate Bench of this Court relying on Form 32 deposited with the Registrar of Companies (ROC) showing that the Director who was prosecuted for being incharge of and responsible for the conduct of the business of the company would be entitled to be discharged, if Form 32 shows that he ceased to be the Director of the company on the date the cheque issued by the drawer was payable. Relying on the judgment of the Supreme Court in All Cargo Movers (I) Pvt. Ltd. v. Dhanesh Badarmal Jain & Anr. (2007) 12 SCALE 39; V.Y. Jose & Anr. v. State of Gujarat & Anr. 2009 1 AD (Cr.) (SC) 567; and Minakshi Bala v. Sudhir Kumar (1994) 4 SCC 142, the learned Single Judge observed as under:-

11. In All Carogo Movers (I) Pvt. Ltd. Vs. Dhanesh Badarmal Jain & Anr. (2007) 12 SCALE 39, the Hon’ble Supreme Court observed as under:- “It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents.” In V.Y. Jose & Anr. Vs. State of Gujarat & Anr. 2009 I AD (Cr.) (S.C.) 567, the Hon’ble Supreme Court has observed as under:- “It is one thing to say that a case has been made out for trial and as such the criminal proceedings should not be quashed but it is another thing to say that a person should undergo a criminal trial despite the fact that no case has been made out at all.” In Minakshi Bala v. Sudhir Kumar (1994) 4 SCC 142, the Hon’ble Supreme Court, inter alia, observed as under in para 7 of the judgment:

12. A criminal trial is a serious matter, having grave implications for an accused, who not only has to engage a lawyer and incur substantial expenditure on defending him, but, has also to undergo the ordeal of appearing in the Court on every date of hearing, sacrificing all his engagements fixed for that day. If he is in business or profession, he has to do it at the cost of affecting his business or profession, as the case may be. If he is in service, he has to take leave on every date of hearing. Besides inconvenience and expenditure involved, a person facing criminal trial undergoes constant anxiety and mental agony, as the sword of possible conviction keeps hanging on his head throughout the trial. Therefore, when there is a reasonably certainty that the trial is not going to result in conviction, it would be neither fair nor reasonable to allow it to proceed against a person such as the petitioner in this case.”

9. Keeping in view the fact that Respondent No.1 himself is wavering whether M/s. Dhanlaxmi Fashion was a Proprietorship or a partnership firm and in view of the documents issued by Govt. Deptt. as stated earlier, it is evident that M/s. Dhanlaxmi Fashion was a proprietorship firm whereof Mahender Singh Rajpurohit was the proprietor. Thus, the filing of the Complaint under Section 138 with the aid of Section 141 of the Act on the premise that the Petitioners were the partners of M/s. Dhanlaxmi Fashion was not permissible.