Union of India vs Nalinidevi

S.K. Seth, J.—This appeal is directed against the judgment of acquittal of Smt. Nalinidevi and Smt. Gayatridevi passed by ACJM (Economic Offences) , Indore in sessions Trial No. 5/87. They being members of a firm viz., M/s. Micro Chemical, Mandsaur, were prosecuted for having committed offence punishable u/s 276(c) read with section 277 of the income tax Act (hereinafter referred to as ''the Act'') on the allegation that false returns were filed in order to invade income tax for the assessment year 1981-82. The accused persons adjured their guilt and set-up a defence that they being only housewives were not in charge of the business of the firm. On the basis of the evidence led by the prosecution, learned trial Judge found that there was no defect with the sanction for prosecution and the firm was guilty for offence punishable u/s 276(c) of the Act. As is stated above, this appeal is directed against the acquittal of two individual partners of the firm. Based on the prosecution evidence, learned trial Judge found that the individual members of the firm were not guilty of any offence and as such they were acquitted. Against this acquittal, the present appeal has been filed.

Learned counsel for the appellant submitted that the trial Judge failed to appreciate the evidence in proper perspective and wrongly arrived at the conclusion that the individual members of the firm were not guilty of the charges levelled against them. It was further submitted that the Court below failed to take notice of the deeming section and thus committed an illegality in acquitting the individual partners.

Per contra, Shri Soni, learned counsel appearing for the acquitted accused persons submitted that in order to bring home the charges levelled against the individual partners, it was the duty of the prosecution to prove and establish that the acquitted partners were in the active and effective control of the working of the firm and having failed to adduce any evidence in this regard, learned trial Judge has rightly acquitted the accused partners. In support of this contention, he has placed reliance on a decision of this Court in the matter of Kanhaiyalal Deepchand Jain and Others Vs. Union of India (UOI) and Another, . He has also placed reliance on an unreported decision in the case of SMT. SITABEN AND OTHERS Vs. UNION OF INDIA AND ANOTHER, .

After having heard learned counsel for the parties and going through the material available on the record, we find that the learned trial Judge after appreciating the evidence has taken a right view. The prosecution failed to adduce any evidence to show that the acquitted women had any active role to play with the business of the firm. No doubt it is true that every partner of the firm is an agent and thus vicariously liable but that liability is restricted only to the civil liability and not of the criminal nature. The burden is always upon the prosecution to prove that the accused persons had an active role to play with the business of the firm and having failed to do so in the present case, the trial Court had no option but to acquit the accused members of the firm. In view of the aforesaid and the two decisions (supra) , we find no illegality with the order of acquittal of the accused members of the firm. Hence, there is no merit and substance in this appeal. Same stands dismissed. The bail bonds of the respondents shall stand discharged.