Dominic Joseph v. State of Kerala and Babu Sebastian

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **THURSDAY, THE 9TH DAY OF FEBRUARY 2017/20TH MAGHA 1938** **Crl.MC.No. 657 of 2016 ()** **-------------------------ST.NO. 2880/2015 OF JUDICIAL FIRST CLASS MAGISTRATE COURT-I, KANJIRAPPALLY** **--------------------------** ## **PETITIONER/ACCUSED:** **-----------------------------------** **DOMINIC JOSEPH, AGED 55 YEARS, S/O.M.D.JOSEPH, MANNIPPARAMBIL HOUSE, PALAMPRA P.O, KANJIRAPPALLY.** **BY ADVS.SRI.S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY** **RESPONDENT(S)/COMPLAINANT/STATE:** **-------------------------------------------------------------** ## **1. STATE OF KERALA,** **REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682 031.** **2. BABU SEBASTIAN, AGED 42 YEARS, S/O.SEBASTIAN, SHOURIYAMKUZHIYIL HOUSE, POOVARANY P.O, KANJIRAPPALLY, KOTTAYAM DISTRICT-686 577.** **R1 BY PUBLIC PROSECUTOR SRI.SAIGI JACOB PALATTY R2 BY ADV. SRI.C.HARINDRAMOHAN NAIR** **THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 09-02-2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **sts** ## **Crl.MC.No. 657 of 2016 ()** ## **-------------------------------------** ## **APPENDIX** **PETITIONER(S)' ANNEXURES: --------------------------------------------** **ANNEXURE I ; CERTIFIED COPY OF THE COMPLAINT FILED BY THE 2ND RESPONDENT.** **ANNEXURE II : COPY OF THE CHEQUE DT 15-6-2015 BEARING NO.727867 OF INDIAN OVERSEAS BANK , KANJIRAPPALLY BRANCH, IN SB ACCOUNT NO.126102000000800 FOR RS. 9 LAKHS.** **ANNEXURE III : COPY OF THE STATEMENT WITH RESPECT TO THE ACCOUNT NO.126102000000800** **RESPONDENT(S)' ANNEXURES: NIL** **----------------------------------------------** **/TRUE COPY/ P.S.TO JUDGE** **==> picture [15 x 8] intentionally omitted <==** **----- Start of picture text -----**<br> sts<br>**----- End of picture text -----**<br> ## ALEXANDER THOMAS, J. ================== Crl.M.C.No.657 of 2016 ================== Dated this the 9[th] day of February, 2017 O R D E R The petitioner herein is the sole accused in S.T.No.2880/2015 on the file of the Judicial First Class Magistrate Court-I, Kanjirappally, for offence under Sec.138 of the Negotiable Instruments Act, instituted on the basis of the complaint filed by the 2[nd] respondent herein. Anx.1 is the certified copy of the impugned complaint, which led to the institution of the aforestated S.T.No.2880/2015. The complaint was filed by the 2[nd] respondent alleging that he had advanced an amount of Rs.9 lakhs to the petitioner with the understanding that the interest chargeable on the said amount will be @ 12% p.a. That the petitioner had agreed to repay the principal amount on 15.6.2015 and the interest on the last date of every English calendar month. That in pursuance of the said loan transaction, the petitioner had issued Anx.II cheque dated 15.6.2015 for amount of Rs. 9 lakhs in favour of the 2[nd] respondent and the cheque, on presentation by the complainant, has resulted in dishonour for want of sufficient funds. After complying with the Crl.M.C.657/16 - : 2 :- statutory formalities, Anx.I complaint was filed before the Judicial First Class Magistrate's Court-I, Kanjirappally, which was taken on file as aforestated S.T.No. 2880/2015. The petitioner asserts that the allegations in Anx.I complainant are incorrect. Further it is stated that the petitioner is a business man, who was conducting the petroleum outlet of M/s.Bharat Petroleum Corporation, in the name, “ _Mathew Anthraper & Co_ .” in the year 2010 to 2013 and that this is a registered firm. Further that the petitioner had stopped the said business in the year 2013 and the petitioner had no connection with the said firm thereafter. It is further asserted that the cheque, which was presented by the complainant, was issued from the account of the said firm. The account was inoperative from 2013. The complainant has not made the firm a party and he has made only the petitioner as the sole accused. Further the case projected by the petitioner is that Anx.III, which is stated to be statement issued by the bank concerned, would indicate that the account is maintained by the firm and that the petitioner is unnecessarily dragged in the malicious prosecution launched by the 2[nd] respondent. It is contended that even if the prosecution is allowed to proceed, it would not serve any purpose and it will not end in a successful Crl.M.C.657/16 - : 3 :- prosecution. The prime basis of this contention is that since the dishonoured cheque in question has been issued from the account maintained by the partnership firm, the drawer of the cheque is primarily the partnership firm and, therefore, the aspects arising out of Sec.141 of the Negotiable Instruments Act will come into play and that therefore the principal accused/offender in such a case is only the partnership firm and that without impleading the partnership firm, which is the principal offender, the prosecution is bound to fail, in the light of the legal position laid down by the Apex Court in relation to matters arising out of Sec.141 of the Negotiable Instruments Act, etc. The petitioner places reliance on the celebrated judgment of the Apex Court in the case Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd. reported in (2015) 5 SCC 661, to canvass the abovesaid position. In the light of these aspects, the petitioner has filed the instant Criminal Miscellaneous Case by taking recourse to the extra ordinary powers conferred on this Court under Sec.482 of the Cr.P.C., with the following prayers; “... .... to quash all further proceedings against the petitioner in S.T.No.2880/2015 on the file of the Judicial Magistrate of First Class-I, Kanjirappally, as it is an abuse of process of court.” 2. Sri.S.Rajeev, learned counsel appearing petitioner Crl.M.C.657/16 - : 4 :- accused has made submissions in the light of the contentions and grounds urged in the Crl.M.C. 3. After service of notice, the 2[nd] respondent has entered appearance through his learned counsel, Sri.C.Harindra Mohan Nair. Sri.C.Harindra Mohan Nair, learned counsel appearing for R-2 (complainant) would submit that the abovesaid factual submissions made by the petitioner are wrong and incorrect and further that such factual aspects, which are disputed, cannot ordinarily be entertained in proceedings under Sec.482 of the Cr.P.C. in the matter of quashment of complaint and that such factual matters are to be raised by the petitioner accused by adducing evidence in that regard in the conduct of the trial in question. Further the learned counsel for R-2 complainant would point out that a mere perusal of impugned Anx.I complaint would show that the specific and focused case of the complainant is that due to the aforementioned loan transaction, the petitioner had personally issued the cheque in question from his S.B. account maintained with the bank concerned in favour of the complainant, etc. Therefore, it is contended that since the specific case of the complainant in the impugned Anx.I complaint is that the cheque in question was issued by the accused, Crl.M.C.657/16 - : 5 :- which is relatable to his S.B. Account with the bank concerned, it is not proper for this Court to look into any extraneous materials at this time, to decide as to whether such factual assertion made in the complaint is correct or wrong. For that, the exclusive forum is the trial court in the ordinary scheme of things. Further Sri.C.Harindra Mohan Nair, learned counsel appearing for R-2 complainant, would also submit that, apart from a bald assertion in the Criminal Miscellaneous Case that the prosecution launched is malicious, no extra ordinary facts and circumstances have been pointed out in the pleadings of this Crl.M.C. or by way of any materials on record to even remotely suggest that the complaint in question is malicious or that permitting further conduct of the complaint would result in any grave miscarriage of justice or would perpetrate any serious injustice on the petitioner or that the complaint has been actuated by malice, conceit or fraud, etc. No material particulars to establish any such case even remotely, has been whispered in the Criminal Miscellaneous Case. Therefore, it is urged by the learned counsel appearing for the complainant that, in the light of the legal principles well settled by the Apex Court and by this Court in the matter of regulation of exercise of the high discretionary power Crl.M.C.657/16 - : 6 :- conferred under Sec.482 of the Cr.P.C., this Court may not interfere with the matter, etc. Further, both parties have made available a copy of the reply notice dated 7.9.2015 issued by the petitioner accused in response to the statutory notice dated 18.8.2015 issued by the 2[nd] respondent complainant in the light of the provisions contained in proviso (b) of Sec.138 of the Negotiable Instruments Act. 4. Heard Sri.S.Rajeev, learned counsel, instructed by Sri.K.K.Dheerandra Krishnan, learned Advocate appearing for the petitioner, Sri.C.Harindra Mohan Nair, learned counsel appearing for R-2 (complainant) and Sri.Saigi Jacob Palatty, learned Prosecutor appearing for R-1 State. 5. It is by now well settled that High Court in exercise of its high discretionary power conferred under Sec.482 of the Code of Criminal Procedure while dealing with pleas for quashment of the impugned complaint would ordinarily take the approach to examine even after taking the averment in the complaint as correct, whether an offence is made out. Of course, that is the well settled conventional perspective, but there could be occasions, where this Court would be fully justified to Crl.M.C.657/16 - : 7 :- examine any other aspects especially if the petitioner is able to cogently and convincingly establish before this Court that the prosecution was actuated by malice, conceit, fraud, etc. by pleading and establishing incontrovertible and unimpeachable facts and circumstances so as to convince the court that necessary directions may be issued so as to prevent gross miscarriage of justice or to prevent perpetration of rank injustice, etc. 6. No such pleadings or materials have been brought out in the instant case by the petitioner. Therefore, this Court is inclined to take the view that the conventional approach is the one that is warranted in the facts and circumstances of this case. A perusal of of the impugned Anx.I complaint would show that the specific factual averment made therein by the complainant is that on account of the loan transaction between the parties, the petitioner accused had issued the abovesaid dishonoured cheque in question for amount of Rs.9 lakhs and that the said cheque is issued from the S.B. account maintained by the petitioner accused. A perusal of Anx.II would also show that the cheque issued in favour of the complainant is seen signed and executed by the individual and it does not bear the seal of any partnership firm or any other Crl.M.C.657/16 - : 8 :- corporate body as envisaged within the ambit of Sec.141 of the Negotiable Instruments Act. In the reply lawyer's notice dated 7.9.2015 issued on behalf of the petitioner accused, it is stated inter alia in para 3 thereof as follows: “In fact my client was running a Petroleum outlet of Bharath Petroleum Corporation Ltd. at Kanjirappally on lease from its licensee A.A.Mathew, Anthraper, Ponkunnam from the month of August 2008 and the business was operated with the help of existing staff of the establishment. So also my client is basically a planter and is holding estates at different arts of Kerala and Tamilnadu and was on frequent travel in connection with the plantation operations and was unable to occupy himself wholly in the station in connection with the said petroleum business. Likewise in order to avail stock of Petrol and Diesel from BPCL, the amount due to M/S Bharath Petroleum Corporation Ltd. is to be transferred to their Bank account in advance and for convenience a Current Account vide number 126102000000800 was opened by my client with the India Overseas Bank Ltd., Kanjirappally Branch on 03/04/2010 in the name of Mr.Mathew Anthraper who was the registered dealer and my client was its Authorised Signatory. So also the stock of Petroleum products to be availed from the Bharath Petroleum Company Ltd. will vary depending upon the sale of petroleum products such as Petrol and Diesel in the outlet. ... ...” 7. Based on the abovesaid averment in the reply notice, Sri.C.Harindra Mohan Nair, learned counsel appearing for R-2 complainant has also contended that the petitioner has clearly admitted therein that he himself was personally conducting the business of the petroleum outlet in question, as the lessee and that the said business arrangement was on the basis of a lease taken from its licensee, one Sri. A.A.Mathew Anthraper, who was said to be the licensee of M/s.Bharath Petroleum Ltd. and further that it is Crl.M.C.657/16 - : 9 :- admitted by the petitioner therein that the bank account in question was opened by the petitioner with the Indian Overseas Bank on 3.4.2010 in the name of Sri.Mathew Antraper, who was the registered dealer and that the petitioner was the authorised signatory of that bank account, etc. On this basis, it is urged by Sri.C.Harindra Mohan Nair, learned counsel appearing for the 2[nd] respondent complainant that these factual aspects admitted by the petitioner would clearly show that the business firm was being personally conducted by the petitioner, by taking the petroleum outlet on lease from its licensee, Sri.A.A.Mathew and further that the bank account in question itself was opened by none other than the petitioner, but formally in the name of an individual, Sri.A.A.Mathew Anthraper and that the petitioner was the authorised signatory of that account, etc. 8. Sri.S.Rajeev, learned counsel appearing for the petitioner has submitted that the contentions of the 2[nd] respondent are untenable and that the account as a matter of fact was in the name of the partnership firm as can be seen from Anx.II and he has made certain other submissions also in that regard. 9. A 3-Judge Bench of the Apex Court in the celebrated Crl.M.C.657/16 - : 10 :- case Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd. reported in (2015) 5 SCC 661, has categorically held that if the dishonoured cheque is issued from the account of the company, then the principal accused/offender in such case is the company and that though the directors and other persons concerned with the day to day affairs of the company are also vicariously liable for commission of the said offence, the prosecution as against the director or officer of the company alone for the offence under Sec. 138 of the Negotiable Instruments Act will not lie without impleading the company as an accused in the said complaint. Sec. 141 of the Negotiable Instruments Act reads as follows: “Sec.141. Offences by companies.—(1) 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: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this chapter. (2) Notwithstanding anything contained in sub-section (1), Crl.M.C.657/16 - : 11 :- where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any Director, Manager, Secretary or other officer of the company, such Director, Manager, Secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.— For the purposes of this section,— (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." Explanation (a) to that section “ _company_ ” means any body corporate and includes a firm or other association of individuals, etc. This Court has held in the case in Fakruddin V.P. v. State of Kerala & Anr. reported in 2014 (4) KHC 815, that in case of dishonour of cheque issued from the account of a partnership firm, where statutory notice has been issued to the managing partner, but not to the partnership firm, then the complaint is not maintainable against the firm for want of notice and the managing partner and other persons working in different categories of the company or the persons, who are in charge and responsible for the conduct of the affairs of the company, cannot be prosecuted on the complaint, even if notice is issued to them individually. This Court has also held in the case in Vijaya Lekshmi (Dr.) v. M/s. Indian Bank, Tvm. & Anr. reported in 2016 (1) KLD 639 that the complaint alleging Crl.M.C.657/16 - : 12 :- offence punishable under Sec.138 of the Negotiable Instruments Act is not maintainable against director of a society registered under the Societies Registration Act, who has signed and issued the cheque, for and on behalf of the society, unless the society is arrayed as an accused in the complaint, etc. On the basis of these aspects, that is urged by the petitioner that the complaint is not maintainable as the partnership firm in question has not been impleaded as the principal accused in the complaint, etc. 10. It has also been held by the Apex Court in the case Mainuddin Abdul Sattar Shaikh v. Vijay D.Salvi, reported in (2015) 9 SCC 622, in para 9 that from a bare reading of Sec.138 of the NI Act, the essentials stated thereion have to be met for attracting a liability under the section and the first and foremost being that the person, who is said to be made liable should be the drawer of the cheque and should have drawn the cheque on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for discharge in whole or part, of any debt or other liability. Therefore, in the bare text of Sec.138, it has been stated clearly that the person, who draws a cheque on an account maintained by him, for paying the Crl.M.C.657/16 - : 13 :- payee, alone attracts the criminal liability envisaged therein. It will be profitable to refer to para 9 of the judgment in Mainuddin Abdul Sattar Shaikh v. Vijay D.Salvi, reported in (2015) 9 SCC 622, p.626, which reads as follows: “9. From a bare reading of Section 138 of the NI Act, the following essentials have to be met for attracting a liability under the section. The first and foremost being that the person who is to be made liable should be the drawer of the cheque and should have drawn the cheque on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for discharge in whole or part, of any debt or other liability. We see that from the bare text of the section it has been stated clearly that the person, who draws a cheque on an account maintained by him, for paying the payee, alone attracts liability.” The Apex Court has also held in P.J. Agro Tech Ltd. v. Water Base Ltd., reported in (2010) 12 SCC 146, p.150, para 13, as follows: “13. .... .... it is very clear that in order to attract the provisions thereof a cheque which is dishonoured will have to be drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part of any debt or other liability. It is only such a cheque which is dishonoured which would attract the provisions of Section 138 of the above Act against the drawer of the cheque.” 11. This Court, as of now, is not inclined to enter into the task of adjudicating the rival pleas on the aspects arising out of the averments in the reply lawyer's notice. However, one thing is clear from a bare reading of the said reply notice and it can be seen that nowhere in the said reply notice has it been stated that the bank account in question was in relation to the partnership firm. Further, Crl.M.C.657/16 - : 14 :- though Sri.S.Rajeev, learned counsel appearing for the petitioner accused has made strong reliance on Anx.III statement of the bank by contending that the bank account is in the name of the partnership firm by name, “ _A.A.Mathew Anthraper & Co_ .”, this Court is inclined to take the view that it is not proper for this Court to enter into any factual aspects based Anx.III for these are all matters which ordinarily belong to the realm of the evidence before the trial court. Moreover, Anx.III is not a document, which can be said to be certified or authenticated document in the manner known to law. But one thing is clear from a reading of Anx.III and it is that the said document would only show that the bank account is in the name of “ _A.A.Mathew Anthraer & Co_ ”. It is a matter of common knowledge that merely because the expression “& Co.” has been used, does not necessarily mean that the said body/institution is either a registered company or a partnership firm or a proprietary concern. It is a matter of common knowledge that at times, even a sole proprietary “ concern may loosely use the expression, ... _**.. & Co.**_ ” to describe its name, to convey the idea to the public that it is a business entity. In the judgment in Dr.V.Bala Raju v. M/s.Pashak Feeds Pvt. Ltd. & Anr. reported in 2005 Crl.L.J.1129, the Andhra Pradesh High Court has Crl.M.C.657/16 - : 15 :- held that sole proprietary concern is not a company or a partnership person or a body corporate or association of individuals as envisaged in Sec.141 of the Negotiable Instruments Act and that a person, who is not either drawer of dishonoured cheque or proprietor, but is in charge of the day to day affairs of the sole proprietary concern cannot be made vicariously liable for the offence under Sec.138 of the Negotiable Instruments Act by roping in the concept of corporate vicarious liability, as envisaged in Sec.141 of the said Act. Therefore, for all these aspects, at this stage of the matter, this Court, while considering the plea for quashment under Sec.482 of the Cr.P.C. is not inclined to accept the contention of the petitioner that the bank account in question is in the name of the partnership firm. 12. Therefore, in the light of these aspects, this Court is not in a position now to accept the plea of the petitioner that the complaint is liable to be quashed by taking recourse to the extraordinary remedy provided under Sec. 482 of the Cr.P.C. on the ground that the cheque in question has been issued from the account of a partnership firm and that complaint will not lie on account of non-impleadment of the partnership firm as the Crl.M.C.657/16 - : 16 :- principal accused in the complaint, etc. It is made clear that this Court has been constrained to make the abovesaid observations and findings only in view of the plea for quashment made at the instance of the petitioner accused. None of these observations and findings in this order shall in any manner even remotely affect the conduct of the trial and it is for the parties to adduce independent evidence before the trial court to advance their respective contentions. It is for the trial court to make a final call on all such issues, untramelled and uninfluenced in any manner by the observations and findings in this order. With these observations and directions, the Crl.M.C. Stands dismissed. sdk+ Sd/ALEXANDER THOMAS, JUDGE ///True Copy/// P.S. to Judge