A.A. Ganapathy vs D.M. Ganesh

A.N. Venugopal Gowda, J.—Respondent is the complainant and the petitioner is accused No. 3 in C.C. No. 315/2014, on the file of Civil Judge and JMFC, Koppa. Said case was instituted against the petitioner and three others, alleging commission of an offence punishable under Section 138 r/w Section 141 of N.I. Act, 1881. Seeking quashing of the said case, insofar as it relates to the petitioner, this petition was filed under Section 482 Cr.P.C.

Mr. Mutturaman, Joint Managing Director of M/s. Algeshwar Estates Limited, a company registered under the Companies Act, arraigned as accused No. 2, having issued cheque bearing No. 917656 dated 22.11.2013 for Rs. 30,00,000/- drawn on Karnataka Bank Limited, Jayapura Branch and the cheque, when presented having been returned by the Bank with endorsement "funds insufficient", after issuance of legal notice, private complaint having been filed, cognizance was taken for the offence punishable under Section 138 of N.I. Act and was registered as C.C. No. 315/2014. Process having been issued to the petitioner, this petition was filed for the relief mentioned supra.

For the petitioner, Sri H.N.M. Prasad, learned advocate contended that there being omission in the complaint about the role of accused No. 3 i.e., the petitioner herein and he being not in charge of and responsible for conduct of the business of the company i.e., accused No. 1, at the relevant time, the prosecution of the petitioner being illegal, interference is called for. Reliance was placed on an order dated 22.08.2014 passed in Crl. P. No. 4498/2014 and it was submitted that the instant case being identical, the petition be allowed.

Sri Vishnu Bhat, learned advocate for the respondent, on the other hand submitted that in view of the proceedings in C.C. No. 550/2005, the cheque in question having been issued towards due discharge of the admitted liability and the petitioner being a party to C.C. No. 550/2005, was notified of the dishonour of the cheque and demand for payment made having not been complied, the complaint was filed. Learned counsel submitted that the petitioner being a group manager of the company - accused No. 1 and having taken active part in the dealings between the complainant and accused No. 1 which is an artificial person, the natural persons who acted on its behalf i.e., accused Nos. 2 to 4 being liable, were prosecuted for the offence punishable under Section 138 r/w Section 141 of the Act. He submitted that in view of the facts and circumstances of the case, no case exists at this stage, for interference under Section 482 Cr.P.C.

Respondent had filed C.C. No. 550/2005 and the matter was settled in the Lok Adalat held on 22.08.2013, wherein, it was agreed to pay Rs. 30,00,000/-. The cheque in question was signed and issued by accused No. 2, as Managing Director of accused No. 1. The cheque, when presented having been dishonoured with shara "funds insufficient", notice dated 04.03.2014 was served and the petitioner replied and repudiated his liability. Thereafter, the court below was approached with an allegation of commission of offence punishable under Section 138 r/w Section 141 of the Act.

Perused the copy of the complaint, produced as Annexure-B. There is no material allegation against the petitioner. Cheque in question was issued on behalf of accused No. 1 by accused No. 2.

Law on the subject is well settled by catena of decisions of the Apex Court. In A.K. Singhania Vs. Gujarat State Fertilizer Company Ltd. and Another, , Apex Court has held that, it is necessary for a complainant to state in the complaint that the person accused was in charge of and responsible for the conduct of the business of the company.

A reading of the complaint, vide Annexure-B, shows that the substance of the accusation is against accused Nos. 1 and 2. From the perusal of the complaint, it could be said that there is no specific allegation made against the petitioner, impleaded as accused No. 3.

In the complaint, except narrating the matters relating to C.C. No. 550/2005, the role of the petitioner with regard to the issue of the cheque in question has not been stated. What part was played by the petitioner and how he is responsible for the finance of accused No. 1 and issuance of the cheque in question has not been stated. No clear case has been made out in the complaint against the petitioner. In view of the complaint not showing the specific role of the petitioner, his prosecution along with other accused, being an abuse of process of the Court and thus causing harassment to the petitioner, following the order dated 22.08.2014 passed in Crl. P. No. 4498/2014, this petition deserves to be allowed.

Since the petitioner is not a signatory to the cheque in question and on the statement of facts appearing in the complaint, vide Annexure-B, the role played by the petitioner with regard to the issuance of the cheque in question having not been made clear and there being no averment with regard to the omissions and commissions indicative of the commission of crime punishable under Section 138 of the Act by the prosecution, the prosecution of the petitioner is illegal.

In view of the above, this petition is allowed and case in C.C. No. 315/2014, on the file of the Civil Judge and JMFC, Koppa, insofar as the petitioner arraigned as accused No. 3 is concerned, is quashed. However, the court below shall proceed further in the case as against the remaining respondents therein and decide the matter with expedition.