G. Jaganathan v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE S.S.SATHEESACHANDRAN** ## **THURSDAY, THE 20TH DAY OF DECEMBER 2012/29TH AGRAHAYANA 1934** ## **WP(C).No. 7320 of 2012 (L) --------------------------** ## **PETITIONER(S):** ## **-------------** **G.JAGANATHAN, AGED 54 YEARS S/O.D.GANESAN, ASWIN CHAMBERS, S.F.NO.39/2 LAKE VIEW, BYE PASS ROAD, CHUNKAM COIMBATORE-641045.** ## **BY ADV. SRI.GEORGE POONTHOTTAM** ## **RESPONDENT(S):** ## **--------------** **1. STATE OF KERALA** **REPRESENTED BY THE PUBLIC PROSECUTOR HIGH COURT OF KERALA, ERNAKULAM, COCHIN- 682031.** **2. THE SUB INSPECTOR OF POLICE** **CENTRAL POLICE STATION, ERNAKULAM DISTRICT-31.** **3. GIRIDARAN** **S/O.LATE D.SHENBAGAMOORTHY, PARTNER, FRIDGE HOUSE 1077-A, HOSPITAL ROAD, NEAR IYYATTIL JUNCTION KOCHI-11.** **R3 BY ADV. SRI.S.SREEKUMAR (SR.) R3 BY ADV. SRI.P.MARTIN JOSE R3 BY ADV. SRI.P.PRIJITH R3 BY ADV. SRI.ANEESH JAMES** **R1-R2 BY ADV. SMT. M.G.LISHA - GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20-12-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 7320 of 2012 (L)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1: COPY OF COMPLAINT DATED 1-11-11 FILED UNDER SECTION 190 AND 200 OF CRIMINAL PROCEDURE CODE BEFORE THE CHIEF JUDICIAL MAGISTRATE COUT, ERNAKULAM. EXT.P2: COPY OF THE FIRST INFORMATION REPORT NO.3551 DATED 3-11-2011 FILED BEFORE THE CHIEF JUDICIAL MAGISTRE COURT, ERNAKULAM. RESPONDENTS' EXHIBITS: EXT.R3(a): COPY OF LETTER DATED 16-10-2009 ISSUED BY THE PETITIONER TO R3. EXT.R3(b): COPY OF LETTER DATED 31-10-2009 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT. EXT.R3(c): COPY OF PARTNERSHIP DEED ATED 01-04-2010. EXT.R3(d): COPY OF LETTER DATED 17-10-2011 ISSUED BY R3 TO THE SOUTH INDIAN BANK. EXT.R3(e) COPY OF PUBLIC NOTICE WAS PUBLISHED IN MATHRUBHUMI DAILY DTD 19-10-2011. EXT.R3(f): COPY OFINTIMATION GIVEN TO THE SUB INSPECTOR OF POLICE, CENTRAL POLICE STATION, ERNAKULAM ON 17-10-2011. EXT.R3(g): COPY OF STATEMENT OF ACCOUNTS OF THE FIRM WITH SOUTH INDIAN BANK LTD.** ## _**TRUE COPY**_ _**PA TO JUDGE.**_ **acd** **S.S.SATHEESACHANDRAN, J. -----------------------------------------------W.P.(C).No.7320 of 2012 ------------------------------------------------Dated this the 20[th] day of December, 2012** ## **JUDGMENT** Petitioner is the accused in a crime registered at Ernakulam Central Police Station, which is now under investigation. That crime was registered on a complaint filed by the 3[rd] respondent before the magistrate, and then referred to the Station House Officer for investigation and report under Section 156(3) of the Code of Criminal Procedure {for short “the Code”}. Ext.P1 is the complaint and Ext.P2, the FIR registered in the crime. Petitioner has filed the above petition to quash Exts.P1 and P2, exercising the extraordinary powers of this court contending that proceedings commenced thereof are abuse of process of the court. ## **W.P.(C).No.7320 of 2012** **:: 2 ::** 2. Petitioner was a partner of a firm in which the 3[rd] respondent another partner, was in management of that firm. On account of difference of opinion between petitioner and 3rd respondent, petitioner retired from the partnership settling the accounts. In terms of the settlement, 3rd respondent issued a cheque for a sum of Rs.1.20 Crores, the amount due to petitioner on settlement of accounts of the firm. However, when the cheque was presented for encashment, it was returned for the reason of 'stop payment order' issued by the drawer. Later, petitioner realised that 3rd respondent had issued a cheque from a cheque book that was in use years before, to deceive and cheat him. Third respondent also filed a complaint setting forth false allegations imputing offences under Sections 379, 463, 465, 467 and 471 of the Indian Penal Code against the petitioner, before the ## **W.P.(C).No.7320 of 2012** **:: 3 ::** magistrate. Ext.P1 is copy of that complaint. That complaint referred to the police has led to registration of Ext.P2 crime. Allegations set out in the complaint are devoid of any merit and the version presented as to keeping of signed cheques and commission of theft of cheque by petitioner is highly improbable and unworthy of any merit, is the case of petitioner. Filing of complaint on mischievous and false allegations, and registering a crime, was done with the mala fide intend to prevent petitioner from proceeding against the 3[rd] respondent, and it is an abuse of process of the court and liable to be quashed exercising extraordinary powers of this court, is his case. 3. Second respondent is investigating Ext.P2 crime. He has filed a statement controverting the case of the complainant. Petitioner presented the cheque before the bank ## **W.P.(C).No.7320 of 2012** **:: 4 ::** only after registration of the crime, and the materials so far collected indicated that the firm in which the 3[rd] respondent is the Managing Director, issue cheque only up to a sum of Rs.20 lakhs and no more, is the statement of the 2[nd] respondent. It is further stated that the cheque, which is alleged to have been stolen, had been presented before the Magistrate Court, Coimbatore, and steps are being taken to get a certified copy of the same. A fair and impartial investigation is being continued in the case is his further statement. 4. Third respondent/de facto complainant has filed a statement with some documents. Refuting the allegations and imputations made against him, and supporting the assertions made in Ext.P1 complaint, that respondent contends that the cheque covered by the case is one kept in blank ## **W.P.(C).No.7320 of 2012** **:: 5 ::** form, but, signed and left in his office, had been stolen by petitioner and, later, used by him for committing the offences imputed. Advertisement made in a newspaper over the missing of cheque covered by the case, intimation given to the bank, and also informing of the police are canvassed as circumstances by the 3[rd] respondent to sustain his case raised in Ext.P1 complaint against the petitioner to proceed against him for the offences imputed. 5. I heard learned counsel for the petitioner and also the 3[rd] respondent. 6. Learned counsel for the petitioner, adverting to the facts and circumstances involved in the case, more particularly that petitioner was a partner of the firm which was later re-constituted on his retirement, contended that the allegation imputed that he had stolen a cheque of the firm ## **W.P.(C).No.7320 of 2012** ## **:: 6 ::** when he continued as a partner is unworthy of any merit and it cannot be accepted even on its face value as every partner of the firm is a principal to the extent that he is bound by acts of other partners. Every person is liable for the act of the firm and he shall have interest in the firm so long as he continues as a partner of the firm, submits the counsel. A partner cannot be imputed of stealing property of the firm where he has such interest, is the submission of the counsel to contend that the allegation imputed to proceed against him that he had stolen a cheque of the firm, signed by another partner and kept in the office of the firm, is so preposterous and unworthy of any merit. He has retired from the firm on settlement of accounts, which is not disputed, is also highlighted by the counsel to contend that the complaint has been filed to prevent him from ## **W.P.(C).No.7320 of 2012** **:: 7 ::** prosecuting the 3[rd] respondent over the dishonoured cheque which had been issued for settling his claims. Learned counsel contends that the disputes covered in the case are purely of civil nature and filing of Ext.P1 complaint and Ext.P2 crime registered thereof are an abuse of process of the court. Learned counsel has relied on Indian Oil Corporation Limited v. NEPC India Limited {2006 (6) SCC 736} to contend that the allegations raised in the complaint at best would constitute purely disputes of civil nature arising from his retirement as a partner from the firm managed by the 3[rd] respondent. None of the offences imputed in Ext.P2 crime under Sections 379, 463, 465, 467 and 471 of the IPC, would arise on the allegation that the cheque was stolen by the petitioner while he continued as a partner of the firm, according to the counsel. Ext.P1 complaint and Ext.P2 crime ## **W.P.(C).No.7320 of 2012** **:: 8 ::** are liable to be quashed exercising the extraordinary powers of this court, submits the counsel. 7. Per contra, learned counsel for the 3[rd] respondent contended that at this stage, when the investigation over Ext.P2 crime is going on and materials gathered by investigating agency indicate prima facie culpability of the petitioner at least in some of the offences imputed, then, this is not a fit case for exercise of extraordinary powers of this court to quash the proceedings as canvassed of. 8. To avoid any prejudice being caused to any of the parties to the proceedings, I refrain from dilating upon the allegations raised in Ext.P1 complaint to impute the offences registered under Ext.P2 crime and the challenges raised thereof with reference to the factual aspects involved that petitioner was a partner of the firm managed by the 3[rd] respondent and his case that the cheque was ## **W.P.(C).No.7320 of 2012** **:: 9 ::** issued towards settlement of his claims on retirement from the firm as the amounts due to him on settlement of accounts. Whatever be the case of petitioner for issue of the cheque towards settlement of claims when he retired from the firm, for the time being before this court that remains only as his assertions, and that alone. Other than that he was a partner of the firm in which 3[rd] respondent was the Managing Director and he retired from the firm on his request, no other material is available to decipher what were the terms of settlement entered into between the partners on his retirement from the firm. No such material has been produced before this court. Petitioner was a partner of the firm when the signed blank cheque was, allegedly, stolen, that by itself cannot be a circumstance to conclude that the disputes arising with respect to such cheque could be construed only as a civil dispute amenable to the jurisdiction of the ## **W.P.(C).No.7320 of 2012** ## **:: 10 ::** civil court only. True, every partner is liable for an act of the firm, and so long as he continues as partner of the firm he shall be having interest in the firm even if it cannot be equated with ownership right. When that be so, he cannot be accused of stealing the property of the firm is the tenor of the submission made by the counsel for petitioner to impeach the merit of Ext.P2 crime. In the present case we are concerned with the criminal liability under penal provision and not civil liability. There is no vicarious liability in criminal case unless statute takes that also within its fold. If a partner while he continues as a partner of the firm, does any penal offence in relation to the affairs of the firm, it cannot be stated that he cannot be prosecuted for such offence or that for his 'acts' the other partners too will be culpable. The entire edifice of the petitioner's case rests on the assertion that the cheque had been issued to him towards the amount ## **W.P.(C).No.7320 of 2012** **:: 11 ::** due to him on retirement from the partnership firm on settlement of accounts thereof. That alone cannot be a ground to conclude, at this stage, that Ext.P1 complaint filed by the 3[rd] respondent and Ext.P2 crime registered thereof are totally baseless and all issues relating to the cheque constitute only civil disputes and not any criminal offence. 9. In the above circumstances, I find, that extraordinary powers of this court cannot be exercised to quash Ext.P1 complaint and Ext.P2 crime as canvassed for by the petitioner. I make it clear that the observations made above are only for the purpose of disposal of this writ petition, and it shall have no bearing in case any report is filed indicting the petitioner for any offence, and a trial ensues thereof. Petitioner is at liberty to challenge such report, if any, filed under Section 173(2) of the Code, after completion of the investigation provided he has sustainable grounds to do so under law. ## **W.P.(C).No.7320 of 2012** **:: 12 ::** Negativing of this writ petition will not preclude the petitioner from canvassing any such challenge, if so available under law, against such report. Subject to the observations made above, the writ petition is dismissed. Sd/- **(S.S.SATHEESACHANDRAN) JUDGE** sk/- **//true copy//**