*THE HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU +Crl.P. No.3821 of 2009 %12-08-2010 # P.L.K.Prasad and another ….petitioner Vs. $ C.Pratap Reddy and another …. Respondents !Counsel for the Appellants: M/s.T.Pradyumna Kumar Reddy Counsel for the Respondent No.1 : Sri J.U.M.V.Prasad Counsel for the Respondent No.2 : Public Prosecutor <Gist : >Head Note: ? Cases referred: 1) 2004(2) ALT (Crl) 141 (Kerala) IN THE HIGH COURT OF JUDICATURE OF ANDHRAPRADESH AT HYDERABAD HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.3821 of 2009 DATE:12.08.2010 Between: P.L.K.Prasad and another …… Petitioners And: C.Pratap Reddy and another …..Respondents HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.3821 of 2009 ORDER : The petitioners 1 and 2/A-1 and A-2 are accused of offences punishable under Section 420 I.P.C and Section 138 of the Negotiable Instruments Act (In short, the Act) in C.C. No.104 of 2009 on the file of Judicial Magistrate of the First Class, Kurnool. 2) It is alleged in the complaint that A-1 and A-2 availed loan of Rs.11,85,000/- for their necessities from the complainant and that towards the said debt A-1 and A-2 jointly issued cheque bearing No.596694 on Indusind Bank, Kurnool branch on 18.06.2008 for the said amount. The said cheque was drawn on account of Sri Saraswathi Chemicals and not on individual accounts of A-1 and A-2. After dishonour of the said cheque due to closure of the account, the complainant issued statutory notice dated 01.07.2008 to A-1 and A-2. No statutory notice was given to Sri Saraswathi Chemicals, which is drawer of the cheque. The complainant did nit file the case on M/s.Sri Saraswathi Chemicals, but has chosen to file the case against A-1 and A-2 only. When the cheque was not drawn on the account of A-1 and A-2 and when after dishonour of the cheque, no statutory notice was given to the drawer of that cheque, the question of filing case under Section 138 of the Act does not arise on A-1 and A-2. 3) The 1st respondent’s counsel placed reliance on Babu V. Suresh[1] of the Kerala High Court, in which it was held: “ There was no liability on the part of the complaint/appellant to implead the business firm or its proprietor in that capacity. He could have very well launched a complaint against the person who had drawn the cheque whether it is in his capacity as the proprietor of the firm or in personal capacity.” With due respect, I do not intend to subscribe to the ratio in that decision. The said decision was rendered without reference to language employed in Sections 138 and 141 of the Act. Proviso (b) to Section 138 of the Act reads as follows: “(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.” Without compliance of the above proviso by way of giving notice to the “drawer of the cheque”, the offence punishable under Section 138 of the Act would not occur. 4) Further, as per explanation (a) to Section 141 of the Act, the word Company includes a firm. No doubt, A-1 and A-2 are partners of M/s.Sri Saraswathi Chemicals. In order to implead A-1 and A-2 in their individual capacity as partners of M/s.Sri Saraswathi Chemicals and in order to mulct A-1 and A-2 with criminal liability under Section 138 of the Act, the complainant is expected in law to make necessary averments stated in Section 141(1) of the Act to the effect that those particular accused were in-charge of and were responsible to the firm for the conduct of its business. Without the statutory notice under Section 138 proviso (b) of the Act and without necessary averments as per Section 141(1) of the Act, no offence under Section 138 of the Act is made out muchless against the petitioners who are partners of the firm. In that view of the matter, I disagree with the ratio in Babu V. Suresh(1 supra). 5) Even though the 1st respondent-complainant could not make out the offence punishable under Section 138 of the Act, it will not lead to quashing of entire complaint filed in the lower Court, but would lead to quashing of complaint relating to offence under Section 138 of the Act alone. 6) In the result, the petition is partly allowed quashing proceedings in C.C. No.104 of 2009 on the file of Judicial Magistrate of the First Class, Kurnool in so far as offence punishable under Section 138 of the Negotiable Instruments Act is concerned; and the petition is partly dismissed in respect of the offence punishable under Section 420 I.P.C is concerned. _______________________________ SAMUDRALA GOVINDARAJULU, J August 12, 2010 NOTE: L.R. Copy to be marked (b/o)KSH [1] 2004(2) ALT (Crl) 141 (Kerala)