Shishan M.A. v. M.K. Murali and State of Kerala

## IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT: ## THE HONOURABLE MR. JUSTICE A.M.BABU FRIDAY, THE 25TH DAY OF NOVEMBER 2016/4TH AGRAHAYANA, 1938 ## Crl.MC.No. 4635 of 2013 --------------------------CC 80/2013 of JUDICIAL FIRST CLASS MAGISTRATE.-IV,KOZHIKODE ## PETITIONER/ACCUSED: ----------------------------------- SHISHAN M.A., AGED 55 YEARS, S/O.M.A.UNEERIKUTTY, PANJAJANYAM, IMA HALL ROAD, NADAKKAVU WEST P.O., KOZHIKODE TALUK, PIN: 673 011. ## BY ADV. SRI.P.V.KUNHIKRISHNAN ## RESPONDENTS/COMPLAINANT & STATE: -------------------------------------------------------------- 1. M.K. MURALI, S/O.RAGAVAN, PROPRIETOR, MALAKKAL CHITS & BANKERS, M.E.S COLLEGE ROAD, KOZHIKODE, NADAKKAVU POLICE STATION, REPRESENTED BY ITS POWER OF ATTORNEY HOLDER M.MURALEEDHARAN, S/O.M.GOPALAN, AGED 51 YEARS, KRISHNAPRASADAM, P.O.KOTTULI, KOZHIKODE - 673 016. ## 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI - 682 031. BY ADV. SRI.P.M.HARRIS R2 BY PUBLIC PROSECUTOR SRI. SANTHOSH PETER THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 21.10.2016, THE COURT ON 25-11-2016 PASSED THE FOLLOWING: Crl.MC.No. 4635 of 2013 () ## --------------------------- ## APPENDIX ## ANNEXURES ----------------------- ANNEXURE A: TRUE COPY OF THE COMPLAINT FILED BY THE 1ST RESPONDENT AGAINST THE PETITIONER DATED 14/12/2012 WHICH IS NOW PENDING AS C.C NO.80 OF 2013 ON THE FILE OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT IV, KOZHIKODE. ANNEXURE B: TRUE COPY OF THE CHEQUE DATED 11/10/2012 BASED ON WHICH ANNEXURE A COMPLAINT IS FILED. ANNEXURE C: TRUE COPY OF THE ACKNOWLEDGMENT SHOWING THE RECEIPT OF THE NOTICE BY THE PETITIONER. //True copy// P.S to Judge ## **A.M.BABU, J.** - - - - - - - - - - - - - - - - - - - - ## Crl.M.C.4635 of 2013 - - - - - - - - - - - - - - - - Dated 25[th] November, 2016 - - - - - - - - - - - - - - - - - - - - - - - - ## **ORDER** 'CR' 1.A cheque dated 11.10.2012 for Rs.8,63,938/bounced. The cheque was allegedly issued to the 1[st] respondent by the petitioner. The reason for its dishonour was closure of the account. Notice was issued to and served on the petitioner. No payment was made. A complaint was filed by the 1[st] respondent alleging commission of an offence under Section 138 of the Negotiable Instruments Act (for short 'the N.I. Act'). The Judicial Magistrate-IV, First Class, Kozhikode took cognizance. The learned Magistrate followed the procedures to be followed under Chapter XV of the Cr.P.C. The complaint was numbered C.C.80/2013. Process was issued to the petitioner/accused. He appeared and got himself released on bail. ## **Crl.M.C.4635/13** 2 - 2.The petitioner produced copies of the complaint, cheque and the postal acknowledgment. Those documents are AnnexA, Annex-B and Annex-C respectively. He seeks to quash the entire proceedings in C.C.80/2013. 3.Petitioner's case is this: What is alleged in Annex-A complaint is a transaction with the petitioner in his personal capacity. Annex-B cheque did not belong to his personal account. The account was maintained by M/s JS Trading Company. The cheque was issued by its managing partner, the petitioner. But he is not liable to be prosecuted under Section 138, NI Act, unless the company is also prosecuted. The company is not prosecuted by the 1[st] respondent. The company cannot be prosecuted since no notice was issued to it. In these circumstances there is no go but to quash the criminal proceedings **Crl.M.C.4635/13** 3 ## against the petitioner. - 4.Heard the learned counsel for the petitioner and the 1[st] respondent. Perused Annex-A, Annex-B and Annex-C. - 5.The learned counsel for the petitioner has argued as follows : The petitioner cannot be prosecuted as the company is not prosecuted. The company cannot be prosecuted as no notice was issued to it. The entire proceedings in C.C.80/2013 is liable to be quashed as the company is not, and cannot be, prosecuted. - 6.The arguments of the learned counsel for the 1[st] respondent are the following : The entire case of the petitioner is built on a rubber seal affixed on Annex-B cheque. The company is not prosecuted as the company cannot be prosecuted. The company cannot be prosecuted as it did not commit any **Crl.M.C.4635/13** 4 ## offence. - 7.Section 141, NI Act, deals with offences by companies. M/s JS Trading Company appears to be a partnership firm as the petitioner refers to himself its managing partner. For the purposes of Section 141, 'company' includes a firm as the Explanation to the Section explains. Whether M/s JS Trading Company is a company or a firm, I shall refer to it a company only. - 8.The learned counsel for the petitioner relied on the decision in Sheeja Mol v. State of Kerala (2015 (5) KHC 548). It was held that the person responsible for the conduct of the company as well as the company should be made accused in a prosecution under Section 138 of the N.I.Act. The complaint was quashed as the company was not arraigned an accused. That was a case where the cheque was issued in **Crl.M.C.4635/13** 5 discharge of the liability of the company. The Hon'ble Supreme Court holds in Aneeta Hada v. M/s Godfather Travels and Tours Pvt. Ltd (AIR 2012 SC 2795) that for maintaining a prosecution under Section 138 of the N.I. Act against the directors of a company, the company must be arraigned an accused. That was a case where a company through its authorized signatory issued a cheque in discharge of the liability of the company. The aforesaid two reported cases were cases where the company committed an offence under section 138 of the N.I.Act. The case on hand is quite different. 9.Sub-section (1) of Section 141 of the N.I.Act reads thus : “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.” **Crl.M.C.4635/13** 6 The words 'if the person committing an offence' appearing in the sub-section are very important. Section 141 has application only if the company has committed an offence under Section 138. The Section has no application in cases where the company commits no offence. - 10.The rubber seal of M/s JS Trading Company is affixed on Annex-B cheque. The cheque is seen signed for M/s JS Trading Company by its Managing Partner. The signatory to it is the petitioner himself. Did he issue the cheque in discharge of the liability of the company ? That is the question. - 11.Nobody has a case that Annex-B cheque was issued in discharge of a debt or liability of M/s JS Trading Company. Even the petitioner has no such case. There are clear and specific averments in Annex-A **Crl.M.C.4635/13** 7 complaint that the cheque was issued in discharge of the personal liability of the petitioner. The transaction alleged in the complaint is a transaction with the petitioner personally. The correctness or otherwise of the allegations in the complaint is not a matter for decision now. It is a matter to be decided on the merits of the case after collection of evidence. It is impossible to jump into a conclusion that the company committed an offence simply because a rubber stamp of the company is affixed on the cheque. I repeat, nobody has a case that the cheque was issued in discharge of any debt or liability of any company. To whom did the account belong is also not a matter to be decided in this Crl.M.C. At the most that question may be in the realm of the defence of the petitioner. He has no case to get the proceedings against him quashed. **Crl.M.C.4635/13** 8 - 12.The complaint against the petitioner was filed and cognizance was taken in 2013. We are in 2016. The learned Magistrate could not dispose of C.C.80/2013 in view of the interim stay in this Crl.M.C. It goes without saying that the interim stay goes as the Crl.M.C itself goes. I do not propose to fix a time limit for the disposal of C.C.80/2013. The learned Magistrate may fix a time limit for himself and dispose of the case as quickly as possible. - 13.There is no merit in this Crl.M.C. The proceedings in C.C.80/2013 is not liable to be quashed. Trial should go on. Crl.M.C deserves only dismissal. Dismissed. **Sd/-** ## **A.M.BABU Judge** Mrcs/15.11.2016 //True copy// P.S to Judge