THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.1084 of 2007 Dated: 21st January, 2010 Between: Shanmugha Sundera Raja & another …Petitioners AND State of Andhra Pradesh, rep. by Public Prosecutor and another. …Respondents THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.1084 of 2007 ORDER: This Criminal Petition is filed by the accused Nos.3 and 4 under Section 482 Cr.P.C for quashing proceedings in C.C. No.380/2005 on the file of I Additional Judicial Magistrate of the First Class, Kodad relating to offence punishable under Section 138 of Negotiable Instruments Act. 2) A-2 to A-4 are partners in A-1 firm. Out of them, A-2 is managing partner and A-3 and A-4 are partners, even as per allegations in the complaint. A-5 is stated to be a broker. It is alleged that A-2 as managing partner of A-1 placed order with the complainant- 2nd respondent through A-5 for supply of boiled rice on credit basis. In that transaction, A-1 became liable to pay Rs.10,91,400/- as per accounts. It is alleged that in discharge of the said enforceable obligation, when demanded, A-2 as managing partner of A-1 issued two cheques for Rs.5,00,000/- and Rs.5,91,400/- on 28.01.2005 and 01.02.2005 respectively in favour of the complainant and that those cheques when presented for encashment, were bounced. Thereupon, the 2nd respondent filed complaint in the lower Court against A-1 to A- 5. 3) It is contended by the petitioners’ counsel that the petitioners who are A-3 and A-4 are not managing partners of A-1 firm and that even as per allegations contained in the complaint, it was A-1 who placed order for supply of boiled rice on behalf of A-1 and it was A-2 as managing partner of A-1 who issued two cheques towards discharge of the obligation and that A-3 and A-4 have no direct participation in this transaction and that therefore, the complaint is not maintainable as against A-3 and A-4. 4) Not only as per allegations in the complaint but also as per sworn statement of the complainant, it was A-2 who placed order for supply of boiled rice and it was A-2 who issued two cheques in favour of the complainant on behalf of A-1 firm. Except as partners of A-1 firm, A-3 and A-4 have absolutely no participation in the transaction which lead to the present complaint. 5) Placing reliance on S.M.S Pharmaceuticals Limited V. Neeta Bhalla[1] it is contended by the petitioners’ counsel that A-2 and A-3 were not in-charge and responsible for conduct of business of A-1 firm at the time of offence and that therefore they are not liable for offence punishable under Section 138 of the Negotiable Instruments Act. No doubt, the above reported decision relates to a company and it’s director. But, reasoning on which the above decision is based on the fact whether the particular director was in-charge and responsible for conduct of business of the company. Applying the same analogy even to a case of partnership firm, I am of the opinion that A-3 and A-4 who are only partners and not managing partners of A-1 firm cannot be mulcted with any penal liability, particularly when they did not place any order for supply of boiled rice and when they did not issue cheques in question. It was A-2 who issued both the cheques as managing partner of A-1. A-3 and A-4 are not privies to the bounced cheque. Therefore, this Court is of the opinion that there is no prima facie case made out by the complainant against A-3 and A-4 who are petitioners herein. 6) In the result, the Criminal Petition is allowed quashing proceedings in C.C.No.380 of 2005 on the file of I Additional Judicial Magistrate of the First Class, Kodad in so far as petitioners 1 and 2/A-3 and A-4 are concerned. __________________________ SAMUDRALA GOVINDARAJULU, J January 21, 2010 KSH Note: L.R. copy to be marked. [1] A.I.R. 2005 SC 3512