Biju Jacob vs Annie Mathew and Others

R. Basant, J.—These revision petitions are filed by the complainant in two identical prosecutions between same parties against the dropping of proceedings against three accused persons involving the dictum in K.M. Mathew Vs. State of Kerala and another, . The prosecutions are u/s 138 of the Negotiable Instruments Act. Admittedly, the respondent/accused 3 to 5 are not signatories in the cheque. There is no contention that they are the managing partners of the firm on behalf of which the co-accused/managing partner had issued the cheque. There was of course a vague and sweeping assertion in the complaint filed that the petitioners are also in charge of an responsible for the conduct of transactions of the firm. After cognizance was taken, respondent/accused 3 to 5 came before this court and complained about the cognizance being taken against them without sufficient materials. Those Crl. M.Cs. were disposed with the observation that it shall be open to the petitioners to claim dropping of proceedings by invoking the dictum in K.M. Mathew Vs. State of Kerala and another, . Accordingly, the learned Magistrate proceeded to consider the objections raised and passed the impugned orders.

It has often come to the notice of this Court that the provisions of Section 138 of the N.I. Act are being invoked as a measure of oppression against sleeping partners who have nothing to do with the day-to-day transactions of a firm. The whole array of partners are forced to face indictment by simply showing them also as accused persons in their capacity as partners of the firm. It is the duty of the Magistrates taking cognisance to alertly apply their mind and come to the conclusion whether sufficient circumstances are there to persuade them to entertain the threshold satisfaction. Materials must be insisted to satisfy the conscience of the court that there are sufficient grounds to proceed against non-signatories/partners. Failure to make such insistence would necessarily reduce Section 138 of the N.I. Act to an engine of oppression in the hands of unscrupulous complainants.

The learned Magistrate, I note, has received Exhibits P1 and P2 on record and looked into them to consider whether dropping of proceedings as per the dictum in K.M. Mathew Vs. State of Kerala and another, can be resorted to. This may not be strictly correct. Adducing evidence at that stage of proceedings is certainly not contemplated or warranted. But in the facts and circumstances of this case, notwithstanding the fact that the Court has looked into Exhibits P1 and P2, I am satisfied that the conclusion of the learned Magistrate that accused 3 to 5 (respondents herein) do not deserve to be proceeded against is eminently correct. In that view of the matter, notwithstanding the reception of Exhibits P1 and P2 at an inappropriate stage, I am satisfied that the impugned orders do not warrant any interference. The challenge raised in these revisions in these circumstances must fail. In the result these revision petitions are dismissed.