Case: G. Ramesh Vs. Kanike Harish Kumar Ujwal and Ors

is a compendious expression to denote the partners who comprise of the firm. By the deeming fiction in Explanation (a) the expression company is defined to include a firm. 12. The issue is whether there are sufficient averments in the complaint to meet the requirement of Section 141(1). This is a matter which has to be determined on a holistic reading of the complaint. From the averments in the complaint, the case of the complainant is that the partnership firm of which the first Respondent is a partner had obtained contracts for data entry, which were being sub-contracted to the complainant. The Accused an alleged to have obtained a caution deposit of Rs. 1,00,000 and to have assigned the job of data entry to the complainant. After completing the job of data entry, the Accused issued two cheques dated 1 November 2010 and 18 December 2010 for the amount of Rs. 2,00,000 and Rs. 2,50,000 respectively. On presentation, the cheques were returned due to insufficiency of funds. It was thereafter that the first Respondent is alleges to have transferred an amount of Rs. 1,00,000 from his account on 8 February 2011 and 10 February 2011. The complaint contains the statement that the parties are related. Thereafter, two further cheques were issued by the managing partner on 30 May 2011 and 19 July 2011 each in the amount of Rs. 2,00,000. After the cheques were returned unpaid due to insufficiency of funds, the complainant is alleges to have informed the Accused and who are stated to have assured him that both the cheques would be honoured on re-presentation in the month of July 2011. 13. The submission is that the above averments are adequate to meet the requirements of Section 141 having regard to the fact that the first Accused is a partnership firm. 14. While laying down the general principles which must apply to this body of law, a two-Judge Bench of this Court in Gunmala Sales Private Limited (supra) held: "30. When a petition is filed for quashing the process, in a given case, on an overall reading of the complaint, the High Court may find that the basic averment is sufficient, that it makes out a case against the Director; that there is nothing to suggest that the substratum of the allegation against the Director is destroyed rendering the basic averment insufficient and that since offence is made out against him, his further role can be brought out in the trial. In another case, the High Court may quash the complaint despite the basic averment. It may come across some unimpeachable evidence or acceptable circumstances which may in its opinion lead to a conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time and therefore making him stand the trial would be an abuse of process of court as no offence is made out against him. 31. When in view of the basic averment process is issued the complaint must proceed against the Directors. But, if any Director wants the process to be quashed by filing a petition Under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he is really not concerned with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case that making him stand the trial would be an abuse of process of court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trial and it could be argued that his further role could be brought out in the trial. Quashing of a complaint is a serious matter. Complaint cannot be quashed for the asking. For quashing of a complaint it must be shown that no offence is made out at all against the Director." 15. In the present case, it is evident from the relevant paragraphs of the complaint which have been extracted above that the complaint contains a sufficient description of (i) the nature of the partnership; (ii) the business which was being carried on; (iii) the role of each of the Accused in the conduct of the business and, specifically, in relation to the transactions which took place with the complainant. At every place in the averments, the Accused have been referred to in the plural sense. Besides this, the specific role of each of them in relation to the transactions arising out of the contract in question, which ultimately led to the dishonour of the cheques, has been elucidated. 16. The complaint contains a recital of the fact that the first set of cheques were returned for insufficiency of funds. It is alleged that the first Respondent transferred an amount of Rs. 1,00,000 on 8 February 2011 and 10 February 2011. The complaint also contains an averment that after the second set of cheques were dishonoured, the Accused assured the complainant that they will be honoured on re-presentation in the month of July 2011. The averments are sufficient to meet the requirement of Section 141(1). 17. The High Court proceeded on the basis that the first Accused was a company in which the other two Accused were directors. Section 141 undoubtedly uses the expression "company" so as to include a firm or association of persons. The fact that the first accused, in the present case, is a partnership firm of which the remaining two Accused are partners has been missed by the High Court. 18. Be that as it may, for the reasons adduced above, we have come to the conclusion that the High Court was in error in quashing the criminal case against the first Respondent.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]11. In determining as to whether the requirements of the above provision have been fulfilled, it is necessary to bear in mind the principle of law that a partnership is a compendious expression to denote the partners who comprise of the firm. By the deeming fiction in Explanation (a) the expression company is defined to include athe averments in the complaint, the case of the complainant is that the partnership firm of which the first Respondent is a partner had obtained contracts for data entry, which were being sub-contracted to the complainant. The Accused an alleged to have obtained a caution deposit of Rs. 1,00,000 and to have assigned the job of data entry to the complainant. After completing the job of data entry, the Accused issued two cheques dated 1 November 2010 and 18 December 2010 for the amount of Rs. 2,00,000 and Rs. 2,50,000 respectively. On presentation, the cheques were returned due to insufficiency of funds. It was thereafter that the first Respondent is alleges to have transferred an amount of Rs. 1,00,000 from his account on 8 February 2011 and 10 February 2011. The complaint contains the statement that the parties are related. Thereafter, two further cheques were issued by the managing partner on 30 May 2011 and 19 July 2011 each in the amount of Rs. 2,00,000. After the cheques were returned unpaid due to insufficiency of funds, the complainant is alleges to have informed the Accused and who are stated to have assured him that both the cheques would be honoured on re-presentation in the month of July 2011.The submission is that the above averments are adequate to meet the requirements of Section 141 having regard to the fact that the first Accused is a partnership firm.In the present case, it is evident from the relevant paragraphs of the complaint which have been extracted above that the complaint contains a sufficient description of (i) the nature of the partnership; (ii) the business which was being carried on; (iii) the role of each of the Accused in the conduct of the business and, specifically, in relation to the transactions which took place with the complainant. At every place in the averments, the Accused have been referred to in the plural sense. Besides this, the specific role of each of them in relation to the transactions arising out of the contract in question, which ultimately led to the dishonour of the cheques, has been elucidated.The complaint contains a recital of the fact that the first set of cheques were returned for insufficiency of funds. It is alleged that the first Respondent transferred an amount of Rs. 1,00,000 on 8 February 2011 and 10 February 2011. The complaint also contains an averment that after the second set of cheques were dishonoured, the Accused assured the complainant that they will be honoured on re-presentation in the month of July 2011. The averments are sufficient to meet the requirement of Section 141(1).The High Court proceeded on the basis that the first Accused was a company in which the other two Accused were directors. Section 141 undoubtedly uses the expression "company" so as to include a firm or association of persons. The fact that the first accused, in the present case, is a partnership firm of which the remaining two Accused are partners has been missed by the High Court.Be that as it may, for the reasons adduced above, we have come to the conclusion that the High Court was in error in quashing the criminal case against the first Respondent.