1. Rule. Learned counsel for the respective respondents waive service. With the consent of the learned counsel for the parties, the matter is taken up for final hearing today.

2. Heard the learned counsel for the petitioners, learned Additional Public Prosecutor for the respondent No. 1 - State and learned counsel for the respondent No. 2.

3. Outline facts of the case may be stated as follow:

NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined

4. While so, the present application under Section 482 of the Criminal Procedure Code, 1973 ( CrPC ) has been filed seeking quash of the said proceedings. The petitioners sought quash of the said criminal proceedings on two principle grounds viz. that the second respondent has supplied the sand on credit basis to the firm 'Ruchil Enterprises' and the petitioners are the partners of the said firm and the cheques were issued on behalf of the firm in the capacity of partners of the said firm and as such, the firm has to be shown as party to the complaint filed under Section 138 of the NI Act and without impleading the firm as a party, that the complaint is filed against the petitioners as partners of the said firm and as such, the criminal proceedings are not maintainable without impleading the firm as a party to the complaint.

4.1 The other ground is that, even though the third legal notice was issued by the second respondent to the petitioners requesting them to pay the cheque amounts within a period of 15 days from the date of receipt of the said legal notice, without waiting till the expiry of the said period of 15 days, the complaint was filed within 3 days Page 4 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024 NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined of the receipt of the said legal notice, which violates the mandate of clause (c) of proviso of Section 138 of the NI Act and the present criminal proceedings initiated against the petitioners are not maintainable.

5. The learned counsel for the petitioners, at the time of hearing the application, reiterated the above submissions and would pray to quash the impugned criminal proceedings that are initiated against the petitioners.

6. The learned counsel for the respondent No. 2 would submit that even though sand was supplied by the second respondent to the firm on credit basis, as the cheques were issued by the petitioners themselves as partners of the said firm, even without impleading the firm as a party to the complaint, still, the complaint is maintainable against the partners of the firm who signed and issued the cheques. He then contends that although the complaint was filed within three days from the date of receipt of the third legal notice by the petitioners, the mandate of clause (c) of proviso of Section 138 of Page 5 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024 NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined the NI Act was not violated as the other two legal notices were given long back, beyond a period of 15 days and as such, on that ground, the complaint cannot be quashed. So, he would pray to dismiss the present application.

7. Thus, from the aforesaid submissions made by the learned counsel for the petitioners and as per the grounds urged in the application seeking quash of the complaint and the criminal proceedings initiated thereon, the contention of the petitioners is two fold: i) that as the impugned complaint was filed and the criminal proceedings thereon were initiated without impleading the firm as an accused, that the same are not maintainable under law and ii) that, filing the complaint under Section 138 of the NI Act, without waiting till expiry of 15 days' period as contemplated in clause (c) of proviso of Section 138 of the NI Act, is bad in law and is liable to be quashed.

7.1 So far as the first ground is concerned, admittedly, sand was supplied by the second respondent on credit basis to the firm by Page 6 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024 NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined name 'Ruchil Enterprises'. Admittedly, the petitioners are the partners of the said firm. The petitioners have also signed the cheques in question for and on behalf of the firm in their capacity as partners of the said firm. The same is evident from the cheques. It is clear from the said cheques that the said cheques were issued by the partners of the firm on behalf of 'Ruchil Enterprises'. Therefore, when the sand was supplied on credit basis to the firm by name 'Ruchil Enterprises', and when the cheques in question towards discharge of the said legally enforceable liability were issued by the partners of the said firm, it is now well settled law that the firm has to be shown as party to the complaint along with the partners who issued the cheques. A complaint under Section 138 of the NI Act, without impleading and showing the firm as an accused, is not maintainable. Section 141 of the NI Act is relevant in the context to consider. Section 141 of the NI Act deals with offence committed by companies under Section 138 of the NI Act and it reads as under:

Explanation.--For the purposes of this section, --

7.2 Thus, reading of Section 141 makes it manifest that if the Page 8 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024 NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Thus, by a deeming fiction, company is also made liable for prosecution and the punishment. Explanation to Section 141 makes it clear that "company" means any body corporate and includes a firm or other association of individuals; and "director", in relation to a firm, means a partner in the firm. Therefore, the requirement of impleading the company as a party to the proceedings as contemplated under clause (1) of Section 141 squarely applies to the firm also in view of explanation appended to Section 141 as discussed supra. Therefore, when the legal position is clear that if the person committing an offence under section 138 is a firm, every person who, at the time the offence was committed, was in charge of, and was responsible to, the firm for the conduct of the business of the firm, as well as the firm, shall be deemed to be guilty of the Page 9 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024 NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined offence and shall be liable to be proceeded against. 7.3 The Apex Court in the case of Himanshu v. B. Shivamurthy and Another , (2019) 3 SCC 797 has ruled as follows:

7.4 The same analogy applies to the case of a firm also in view of the explanation appended to Section 141 of the NI Act. Therefore, when a cheque was issued by a partner of the firm, prosecution under Section 138 is not maintainable without arraigning the firm as accused.

7.5 Again, the Apex Court recently in the case of Dilip Hariramani v. Bank of Baroda , 2022 SCC OnLine SC 579 elaborately discussed the legal position in this regard and held in paragraphs 15 and 16 as follows:

16. 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 criminal 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 , Himanshu v. B. Shivamurthy and Hindustan Unilever Limited v. State of Madhya Pradesh . 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 felicitous for the present case. No such plea or assertion is made by the respondent."

7.6 Therefore, in view of the settled law in this regard, as discussed supra, as the complainant has not impleaded the firm as accused in the complaint, the present complaint filed only against the partners of the firm is clearly not maintainable in law. 7.7 Bombay High Court in the case of Satheesan Kuttappan v. Page 12 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024

NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined P.P. Sudhakaran and Another, 2023 SCC OnLine 2216, at paragraphs 11, 12 and 15, has also clearly held after considering the decision of the Apex Court in Himanshu (supra) that even in respect of the firm which is not a registered firm, also a complaint under Section 138 of the NI Act, without impleading the firm as party to the complaint is not maintainable.

7.8 Apropos the second ground that without waiting till the expiry of 15 days time after issuance of the legal notice or receipt of the legal notice that the complaint was filed within 3 days from the date of issuance of the legal notice is concerned, clauses (b) and (c) of proviso of Section 138 mandates that: (b) the payee or the holder in due course of the cheque, as the case may be, shall make 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; and (c) if the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days Page 13 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024 NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined of the receipt of the said legal notice, then a complaint has to be made under Section 138 of the NI Act. Therefore, waiting for a period of 15 days from the date of receipt of the legal notice to file the complaint under Section 138 of the NI Act, is mandatory and a condition precedent for filing the complaint under Section 138 of the NI Act. In the instant case, the first two legal notices that were issued by the second respondent were not served upon the petitioners. Therefore, the third legal notice was issued in compliance with clause (b) of proviso to Section 138 of the NI Act. That was served on the petitioners. But, without awaiting for a period of 15 days as contemplated in clause (c) of proviso to Section 138 , the complaint in question was presented, within three days from the date of receipt of legal notice by the petitioners. Therefore, on that ground, the present complaint and the criminal proceedings initiated thereon are clearly not maintainable. The Apex Court also, in the case of Gajanand Burange v. Laxmi Chand Goyal , 2022 SCC OnLine SC 1711 has held that filing of complaint without expiry of 15 days' period which is mandatory, is not maintainable. Page 14 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024

NEUTRAL CITATION R/CR.MA/21568/2019 JUDGMENT DATED: 25/01/2024 undefined 7.9 Thus, the complaint filed by the second respondent under Section 138 of the NI Act and the criminal proceedings initiated thereon are clearly unsustainable in law on the aforesaid two grounds, which are urged by the petitioners. Therefore, the continuation of the criminal proceedings against the petitioners in the given facts and circumstances of the case would clearly amount to abuse of process of Court and the law.

8. Ergo, present application deserves to be allowed and is accordingly, allowed. The complaint and the criminal proceedings pending before the learned 9th Additional Senior Civil Judge at Vadodara in Criminal Case No. 43185 of 2014 under Section 138 of the NI Act against the petitionerser are hereby quashed. Rule is made absolute accordingly.

[ Cheekati Manavendranath Roy, J. ] hiren /97 Page 15 of 15 Downloaded on : Wed Jan 31 20:32:48 IST 2024