At revision level, whether need to make accused parties
Madhu Mittal
(Querist) 29 February 2024
This query is : Resolved
Sub: At revision level, whether need to make accused parties when cognizance is not taken against Firm as well as non-signer partners of cheque when averments against all in complaint as well as notices to all, no reply by any partners
A loan of Rs. One lac was given to a Partnership Firm having three partners on the basis of Post dated cheque of Partnership Firm with the consent of all partners. When the cheque was presented for payment on its date, the said cheque is dishonored. A legal notice by Rgd post was given to Partnership Firm as well as all three partners, duly got by them but no reply from any of them. But before lodgment of complaint u/s 138, 12 posted cheques were handed over on behalf Partnership Firm signed by only one partner with the consent of all. When presented all 12 cheques were dishonored, all were dishonored. First 11 complaints were lodged and cognizance for all were taken by the same Trial Court. For 12th cheque, procedure was changed and the court which will deal, was allotted by Chief Judicial Magistrate, so this cheque was dealt by another Court. And that another court took cognizance only of the partner who signed the cheque while there were sufficient averments that at the time of First post dated cheque and at the time of taking 12 post dated cheques, all partners were incharge and responsible for working of the Firm and all are involved both time when loan is given + one post dated cheque was given and when second time 12 postdated cheques were given . Thus cognizance against Firm and remaining two partners were not taken. Aggrieved by this new court, Revision was filed in ADJ court making only Govt of Rajasthan as Respondent. Citation of Supreme Court Micromax_Informatics_Limited_vs_Meenu_Goyal_on_12_March_2021 sc (in which it is stated only averments in complainant to be seen at the time to taking cognizance, even reply given by accused was not to be seen ) and citation of Bommidi Madhu Sudhanrao vs. Kallapu Ramesh and Anr. (09.11.2010 - APHC) of Andhra Pradesh High Court (it was stated at point 3. Though notices are sent to the Respondents 1 and 2 the same are not returned unserved. However as the point involved in the present case is between the court and the Petitioner, this Court is of the view that there is no need for this Court to hear the Respondents 1 and 2.) was handed over to ADJ Court, but ADJ Court insisted that Firm as well as all partners should be made Respondents.
Now what I want to know is that when even reply of accused not to be seen at the time of taking cognizance as per above SC ruling and matter is between Court and Complainant at the time of Cognizance, How to pursue ADJ Court not to insist to make Firm and partners as respondents as there will be of no use of them whatever they say, only averments in the complain to be seen. Any citation.
T. Kalaiselvan, Advocate
(Expert) 29 February 2024
In Standard Chartered Bank v. State Of Maharashtra2, the Supreme Court held that Section 141 applies not only to companies but also to other legal entities such as trusts and societies. The court also held that Section 141 does not require mens rea (guilty mind) as an essential ingredient for imposing criminal liability on persons associated with an entity that issues a dishonoured cheque. It is sufficient if they were in charge of and responsible for its affairs at relevant time.
In N.K. Wahi v. Shekhar Singh3, the Supreme Court held that Section 141 does not create an absolute bar on filing complaints against directors who have resigned from their positions before issuance of cheque. The court held that such directors can still be held liable if it is shown that they were in charge of and responsible for the affairs of the company at the time when the cheque was issued or when the liability arose.
Anu Mehta, the Supreme Court held that Section 142 does not make all partners liable for an offence committed by a partnership firm under Section 138. It only makes those partners liable who were in charge of and responsible for the conduct of business at relevant time.The court also held that Section 142 does not require specific averments to be made against each partner in order to make them liable. It is enough if general averments are made against all partners and then it is for them to prove their innocence.
The concept of vicarious liability in cheque bounce cases is based on the principle of collective responsibility of persons who are associated with an entity that issues a dishonoured cheque. However, this concept is not absolute and does not make every person associated with such entity liable for the offence. The liability depends on the nature and extent of involvement of such person in the affairs of the entity and the transaction that led to the issuance of the cheque. The burden of proof also shifts from the complainant to the accused depending on the facts and circumstances of each case.
Ref: S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 2: Standard Chartered Bank v. State Of Maharashtra, (2016) 6 SCC 62 3: N.K. Wahi v. Shekhar Singh, (2007) 9 SCC 481 : Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd., (2012) 5 SCC 661 : Gunmala Sales Pvt. Ltd. v. Anu Mehta, (2015) 1 SCC 103.
I have already given my reply to this question you raised in kaanoon.com also
Madhu Mittal
(Querist) 29 February 2024
Respected sirji T. Kalaiselvan, Advocate
With due respect to y, in this query What I require is citation/ guidelines how to satisfy ADJ Sirji, that When nothing from accused side can be taken into consideration as per Citation of Supreme Court Micromax_Informatics_Limited_vs_Meenu_Goyal_on_12_March_2021 sc (in which it is stated only averments in complainant to be seen at the time to taking cognizance, even reply given by accused was not to be seen ), what purpose will it serve in adding Firm and all its partners as respondents, as per Basic Rule is that at the time of taking cognizance , accused is not to be heard.
As per citation of Bommidi Madhu Sudhanrao vs. Kallapu Ramesh and Anr. (09.11.2010 - APHC) of Andhra Pradesh High Court (it was stated at point 3. Though notices are sent to the Respondents 1 and 2 the same are not returned unserved. However as the point involved in the present case is between the court and the Petitioner, this Court is of the view that there is no need for this Court to hear the Respondents 1 and 2.) , here in this citation it appears Respondents 1 and 2 suppose accused were made parties, but at the same time, it is held “the point involved in the present case is between the court and the Petitioner, this Court is of the view that there is no need for this Court to hear the Respondents 1 and 2”, so what I want to say that when in my case also, as per me Learned Trial Court made a mistake by only taking cognizance u/s 138 N I Act against the signer of cheque of Firm only. So when as per Supreme Court Micromax_Informatics_Limited only averments in complaint to be seen, so as per me there is no need of sending notices to accused Firm and its partners by the ADJ sir. So now I again request to give me any citation which say that there is no need of making accused Firm and its partners at revisional level in the matter of cognizance u/s 138 N I Act , as only averments in complaint to be seen, and if Revision court after going through the complaint deduces that there is sufficient averments, it either itself took cognizance or remand matter to Learned Trial Court. If Revision court after going through the complaint deduces that there is not sufficient averments, revision be dismissed. But Why insisting on making accused Firm and its partners as Respondents when anything to be heard from them not to be considered at the time of taking congnizance.
Thanks with regards,
Waiting for proper Guidelines,
above two citations for your ready reference have been sent to y
T. Kalaiselvan, Advocate
(Expert) 01 March 2024
I will go through the contents and the citations sent by you to my personal whats app number and shall revert with my reply directly to you, thank you.
P. Venu
(Expert) 09 March 2024
What is the issue on which revision is being sought?
Madhu Mittal
(Querist) 10 March 2024
Respected P. Venuji,
Trial court took cognizance only of the partner who signed the cheque while there were sufficient averments against Firm as well as all partners. But Trial court even did not take congnizance of Firm alongwith the partner who signs the cheque. Now complainant went in Revision for getting cognizance against Firm and other remaining partners. Here Matter is between Court and Complainant. And according to above mentioned Citation of Supreme Court of Micromax, only averments in Complainant to be seen at the time of taking cognizance, So as per me there is no need of making Firm and other partners as Parties in revision as when they will not be heard at all, why should they should be made parties? This is the issue, whether they should be made parties or not at revision level only for taking cognizance to be taken against them or not. As at trial Court also there is no need of hearing accused at the time of taking cognizance.
