1. Since the issue involved in both these matters is same, both these matters are taken up together. Learned advocates for the respective parties state that except the Page 1 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 details in respect of cheques, rest of the facts are almost identical and, therefore, by consent of learned advocates both these matters are taken up together for final hearing.

2. Rule. Learned Additional Public Prosecutor Ms.Maithili Mehta for Respondent No.1 - State and learned advocate Mr.Chaitanya Joshi for Respondent No.2

- original complainant.

3. Considering the fact that barring the cheque details i.e. date and amount, rest of the facts of both the petitions are similar and, therefore, facts of Criminal Miscellaneous Application No.3853 of 2020 are taken for consideration, which are in brief stated as under:

3.5 In respect of Criminal Miscellaneous Application No.3877 of 2020, criminal case was registered as Criminal Case No.9415 of 2018 before the Court of learned Judicial Magistrate First Class, Ahmedabad (Rural).

3.6 After the aforesaid two complaints were registered and summons were issued to the present applicant, the applicant preferred present application under Section 482 of the Code of Criminal Procedure, 1973 (' Cr.P.C .', for short) for quashing and setting aside both the complaints on the ground that since the petitioner is the partnership firm and at the time of giving notice as well as at the time of registering the complaints under Section 138 of the Negotiable Instruments Act, though the partners were joined as accused, notices were issued only to the partners, company is not joined as accused in the complaints and, therefore, as per the Section 141 of the Page 4 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 NI Act , since the company / partnership firm was not joined as accused in the complaints, the learned Magistrate has committed error by taking cognizance of the complaints and by issuing summons against the present applicant.

4.1 Heard learned advocate Mr.Rahul Dholakiya for the applicant. He pointed out from the record and drew attention of this Court to the partnership deed executed between the petitioner and his partner Muhammed Jaseer wherein initially when the partnership firm was incorporated, the name of the firm was 'FAP International' and subsequently it was changed to 'Nico Tiles'. Learned advocate Mr.Dholakiya also pointed out from the record that cheque was issued on behalf of 'Nico Tiles' and not in his personal capacity by the present applicant. Learned advocate Mr.Dholakiya thereafter contended that as per the provisions of Section 141 of the NI Act, all the directors, who are responsible with day- to- day affairs of the company as well as company itself, both can be prosecuted if a cheque returns which is issued by the company. He submitted that in the instant case though the partners of the partnership firm were joined as accused in the complaint, the Firm i.e. 'Nico Tiles' was never joined as accused in the complaints and, therefore, the learned trail Court has committed error by taking cognizance of complaints and thereby issuing summons against the present applicants and prayed that since the complaint itself is defective, cognizance could not have Page 5 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 been taken by the learned Magistrate and, therefore, the complaint is required to be quashed.

4.2 Learned advocate Mr.Dholakiya relied upon the judgment of the Hon'ble Supreme Court in the case of Himanshu v. B. Shivamurthy reported in (2019) 3 SCC 797 and submitted that necessary conditions of Section 141 of the NI Act must be complied with. He submitted that the conditions under Section 141 of the NI Act are mandatory in nature and the company and its directors both are required to be arraigned as accused. He submitted that once the complaint is filed at a later stage company cannot be arraigned as accused at par with Section 141 of the NI Act. He further relied upon the recent judgment of Hon'ble the Supreme Court of India rendered in Criminal Appeal No.767 of 2022 in the case of Dilip Hariramani vs. Bank of Baroda on dtd.09.05.2022 and submitted that as far as mandatory requirement of Section 141 of the NI Act is concerned, the same is not confined only to the registered company but that is applicable only to the partnership firm as well. He submitted that merely because the present applicant is partner of partnership firm, no complaint can be filed against the present without arraigning the partnership firm as an accused in the complaint as the cheque was issued by the company / firm.

4.3 By relying upon above judgment, learned advocate Mr.Dholakiya submitted that the learned trial Court has Page 6 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 committed error by taking cognizance of the complaints and thereby issuing summons against the present applicant.

4.4 He submitted that in view of the view taken by Hon'ble the Supreme Court of India by way of aforesaid judgments, as relied upon by him, complaint under Section 138 of the NI Act is defective in nature and, therefore, no cognizance of the same could have been taken by the learned trial Court and, therefore, complaints itself being defective and are not making requirements of Section 141 of the NI Act, require to be quashed and set aside.

5. Opposing the aforesaid contentions made by learned advocate Mr.Dholakiya, learned advocate Mr.Chaitnya Joshi for the complainant submitted that language of Section 141 of NI Act clearly indicates that it is applicable only to the companies and not to the partnership firm. He further submitted that what is important is to meet the ends of justice and, therefore, he may be permitted to amend the complaints by arraigning the partnership firm under the NI Act as one of the accused in the complaints.

6. At this stage, learned advocate Mr.Dholakiya opposed the aforesaid request made by learned advocate Mr.Chaitnya Joshi stating that in a petition preferred by the present applicant seeking quashing of the FIR, the Respondent No.2 - complainant cannot seek any relief. For that he was required to file appropriate application Page 7 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 before the appropriate Court which till date he has not preferred. Even otherwise, under the Criminal Law amending the complaint is not permissible and, therefore, he requested that such submission may be discarded outrightly.

7. Learned Additional Public Prosecutor Ms.Maithili Mehta submitted that this being dispute of personal nature, the Court may pass appropriate order considering the facts of the case.

8.1 Having heard learned advocates for the parties, what has been noticed by this Court is the fact that at the time when the cheque issued to the Respondent No.2 was returned and when notice under Section 138 of the NI Act was given by the Respondent No.2, the said notice was given only to the present petitioner and his partner Muhammed Jaseer. The notice was not issued to 'Nico Tiles'. Further, even at the time of filing of the complaint, the complaint was filed only agianst the present applicant and his partner Muhammed Jaseer and not against the Nico Tiles. Now, therefore, while taking into consideration the submissions made by learned advocate Mr.Dholakiya what is required to be seen is whether the provisions of Section 141 of the NI Act are applicable in respect of partnership firm as well. For that this Court has considered the judgment of the Hon'ble the Supreme Court in the case of Dilip Hariramani vs. Bank of Baroda (supra) wherein in para:1, the Hon'ble Supreme Court, Page 8 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 while stating the facts, has categorically stated that issue under consideration before the Hon'ble Supreme Court was whether partners can be convicted and held liable vicariously when the partnership firm is not an accused and tried for primary / substantive offence.

8.2 While considering the aforesaid aspects, this Court has noted the fact that the cheque was issued by the applicant in the name of the company and not in his personal capacity and, therefore, the issue is required to be examined by keeping in mind the vicarious liability of the present applicant. The Hon'ble Supreme Court examined the issue of vicarious liability in respect of Section 141 of the NI Act and its applicability to note whether the applicability of Section 141 should be only in respect of companies or even to the firms. In the case of Dilip Hariramani vs. Bank of Baroda (supra), the Hon'ble Supreme Court has observed, in paras:11 to 15, are as under:

R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 day business of the company or the firm', the conviction of the appellant has to be set aside [ State of Karnataka v. Pratap Chand and Others (1981) 2 SCC 335]. The appellant cannot be convicted merely because he was a partner of the firm which had taken the loan or that he stood as a guarantor for such a loan. The Partnership Act, 1932 creates civil liability. Further, the guarantor 's liability under the Indian Contract Act, 1872 is a civil liability. The appellant may have civil liability and may also be liable under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 . However, vicarious liability in the criminal law in terms of Section 141 of the NI Act cannot be fastened because of the civil liability. Vicarious liability under sub-section (1) to Section 141 of the NI Act can be pinned when the person is in overall control of the day-to-day business of the company or firm. Vicarious liability under sub- section (2) to Section 141 of the NI Act can arise because of the director, manager, secretary, or other officer's personal conduct, functional or transactional role, notwithstanding that the person was not in overall control of the day-to-day business of the company when the offence was committed. Vicarious liability under sub-section (2) is attracted when the offence is committed with the consent, connivance, or is attributable to the neglect on the part of a director, manager, secretary, or other officer of the company.

12. The demand notice issued on 04th November 2015 by the Bank, through its Branch Manager, was served solely to Simaiya Hariramani, the authorised signatory of the Firm. The complaint dated 07th December 2015 under Section 138 of the NI Act before the Court of Judicial Magistrate, Balodabazar, Chhattisgarh, was made against Simaiya Hariramani and the Page 10 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 appellant. Thus, in the present case, the Firm has not been made an accused or even summoned to be tried for the offence.

13. The judgment in Dayle De'souza v.

Government of India through Deputy Chief Labour Commissioner (C) and Another [2021 SCC Online SC 1012], answered the question of whether a director or a partner can be prosecuted without the company being prosecuted without the company being prosecuted. Reference in this regard was made to the views expressed by this Court in State of Madras v. C.V. Parekh and another [(1970) 3 SCC 491] on the one hand and the divergent view expressed in Sheoratan Agarwal and Another v. State of Madhya Pradesh [( 1984) 4 SCC 352] and Anil Hada v. Indian Acrylic Ltd. [(2000) 1 SCC 1]. This controversy was settled by a three Judge Bench of this Court in Aneeta Hada (supra), in which, interpreting and expounding the difference between the primary / substantial liability and vicarious liability under Section 141 of the NI Act, it has held:

14. The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends vicarious liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi v. Sangita Rane [(2015) 12 SCC 781], Himanshu v. B. Shivamurthy and another [(2019) 3 SCC 797] and Hindustan Unilever Limited v. State of Madhya Pradesh [(2020) 10 SCC 751]. The exception carved out in Aneeta Hada (supra), which applies when there is a legal bar for prosecuting a company or a firm, is not Page 12 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 felicitous for the present case. No such plea or assertion is made by the respondent.

15. Given the discussion above, we allow the present appeal and set aside the appellant's conviction under Section 138 read with Section 141 of the NI Act. The impugned judgment of the High Court confirming the conviction and order of sentence passed by the Sessions Court, and the order of conviction passed by the Judicial Magistrate First Class are set aside. Bail bonds, if any, executed by the appellant shall be cancelled. The appellant is acquitted. However, there would be no order as to costs."

8.3 Now keeping in mind the aforesaid judgment, when the cheque was issued in the name of 'Nico Tiles' and when the petitioner as well as other partners were arraigned as an accused in the criminal complaints. Now since both i.e. the petitioner along with other partner had issued cheque in the name of company, the liability of the petitioner if at all the complaint against them is considered by the Court and allowed ultimately, will be vicarious liability but since the company was not joined as an accused, even that vicarious liability could not have been fastened upon the present applicant and, therefore, even if it was a partnership firm, it was necessary for the complainant to arraign as accused in the complaint. Further, when the complaint was registered in the year 2018 and for four years the original complainant - Respondent No.2 did not make any complaint or any attempt, nor it is permitted as per criminal law to permit the complainant to amend the complaint, the request of Page 13 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022 R/CR.MA/3853/2020 JUDGMENT DATED: 16/06/2022 learned advocate Mr.Chaitanya Joshi to permit him to amend the complaint also cannot be considered at this stage.

9. In view of the aforesaid discussion, since the Respondent No.2 did not arraign the company wherein present applicant was partner as an accused,, the complaint itself was defective and, therefore, trial Court ought not to have taken cognizance of the complaint against the present applicant.

10. For the reasons recorded above, both the applications are allowed and are disposed of accordingly. Resultantly, the complaint being Criminal Case No.9414 of 2018 and Criminal Case No.9415 of 2018 before the learned Judicial Magistrate First Class, Ahmedabad (Rural) filed under Section 138 read with Section1 41 of the Negotiable Instrument Act, are hereby quashed and set aside.

11. Rule is made absolute to the aforesaid extent. No order as to costs. Direct service is permitted.

(NIRZAR S. DESAI,J) MISHRA AMIT V. Page 14 of 14 Downloaded on : Sat Dec 24 18:57:32 IST 2022