HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION NOS.7930 & 7931 OF 2007 DATE:08.07.2010 CRIMINAL PETITION NO.7930 OF 2007 Between: M/s. Venkata Sainath Enter Prises, rep. by T. Venkataramana, Srikakulam District. …… Petitioner. And: M/s. Dhanuka Pesticides Ltd., rep. by its G.P.A and authoried Signatory Sri K. Mrakandeyulu and 2 others. …..Respondents CRIMINAL PETITION NO.7931 OF 2007 Between: M/s. Venkata Sainath Enter Prises, rep. by T. Venkataramana, Srikakulam District. …… Petitioner. And: M/s. Northern Minerals Limited, rep. by its G.P.A and authoried Signatory Sri K. Mrakandeyulu and 2 others. …..Respondents HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION NOS.7930 & 7931 OF 2007 COMMON ORDER: 1. These two petitions raise common question regarding liability of A-1 company for dishonour of cheques issued by proprietor of A-2 proprietary concern. 2. It is contention of the complainants/1st respondent in both the petitions that A-1 is a dealer and that as per instructions of A-1, goods have been supplied by the complainants to A-2. According to the 1st respondent’s counsel, sale/purchase invoices show that they were prepared in the name of A-1, but goods thereunder were delivered to A- 2. It was proprietor of A-2 who issued the two dishonoured cheques in favour of the two complainants/1st respondents. A-1 in C.C.Nos.1219 of 2006 (old C.C.No.1009 of 2003) and C.C.No.566 of 2006 (old C.C.No.1006 of 2003) on the file of I Additional Chief Metropolitan Magistrate, Hyderabad is the petitioner in these two petitions. A-2 whose proprietor issued the cheques is not questioning the complaints. 3. Placing reliance on Ramanlal Bhailal Patel v. State of Gujarat[1] of the Supreme Court, it is contended by the 1st respondent’s counsel that “other association of individuals” occurring in Clause(a) of Explanation to Section 141 of the Negotiable Instruments Act (in short, the Act) has to be extended to a case of this nature where A-1 and A-2 put together are responsible for supply of goods by the complainant and for whose value the dishonoured cheques were issued by A-2. In Ramanlal (supra), the Supreme Court observed that the terms “association of persons” and “body of individuals” have a legal connotation and refer to an entity having rights and duties. It is further observed that the said phrases have to be understood in the legal sense and not in the literal sense. Therefore, this Court is of the view that applying the doctrine of ejusdem generis, the phrase “association of individuals” occurring in Clause(a) of Explanation to Section 141 of the Act, has to be interpreted as an entity similar to a body corporate or a firm and not mere association of persons in stray transactions. 4. In the case on hand, A-1 did not issue any cheque much less on its own account in any bank; and it was A-2 who issued the cheque on A- 2’s account in the bank. Therefore, there is absolutely no criminal liability for A-1 for offence punishable under Section 128 of the Act. This will not take away right of the complainants/1st respondents to make a claim against A-1 in civil court in a properly constituted civil suit. 5. In the result, both the petitions are allowed quashing proceedings in C.C.Nos.1219 of 2006 (old C.C.No.1009 of 2003) and C.C.No.566 of 2006 (old C.C.No.1006 of 2003) on the file of I Additional Chief Metropolitan Magistrate, Hyderabad in so far as the petitioner/A-1 is concerned. __________________________________ SAMUDRALA GOVINDARAJULU,J. Date:08.07.2010. Gk. HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION NOS.7930 & 7931 OF 2007 Date:08.07.2010 Gk. [1] (2008) 5 Supreme Court Cases 449