This petition is filed under Section 482 of Cr.P.C., to call for the records relating to the proceedings in S.T.C.No.177 of 2008, on the file of the learned Judicial Magistrate No.1, Thoothukudi, and to quash the same.
2.The brief facts of the case are as follows:-
The petitioners are arrayed as A2 and A3 in S.T.C.No.117 of 2008, on the file of the learned Judicial Magistrate No.1, Thoothukudi. The first petitioner is the mother and the second petitioner is the son. The husband of the first petitioner Late.T.P.Muthusamy, was the sole proprietor of M/s.Muthukumaran Stores, which is the proprietary concern. The petitioners have nothing to do with the said business. The said Muthusamy died on 12.12.2006, leaving behind the petitioners and three others as legal heirs. On the death of the said T.P.Muthusamy, the children agreed to set apart the business to their mother, the first petitioner herein, and as such, the first petitioner took over the properties of the said Muthukumaran Stores and presently doing the business as M.K.Traders as its sole proprietor. On 07.05.2007, the respondent issued a notice stating that a sum of Rs.7,00,000/- was borrowed on 27.11.2006 for the said business and to discharge the said loan, the proprietor of the said T.P.Muthukumaran Stores issued three cheques, dated 01.12.2006, 27.11.2006 and 05.12.2006, for a sum of Rs.2,00,000/-, Rs.2,00,000/- and 3,00,000/- respectively and the cheques were returned without collection and therefore, the petitioners are liable to pay. The petitioners sent a reply denying all the allegations. However, the respondent has filed a private complaint under Section 138 of Negotiable Instruments Act, which was taken on file in S.T.C.No.177 of 2008. The petitioners have come forward with this petition praying to quash the same on the following grounds:-
i.that the petitioners being the legal heirs of the deceased and the cheques drawn by the deceased predecessor will not bind the petitioners and there is no legal liability.
ii.that the cheques were presented four months after the death of the drawer and the cheques are not valid.
iii.that the petitioners cannot be held liable as the proprietaryship concern is not covered under Section 141 of the Negotiable Instruments Act.
3.Heard the learned counsel appearing for the petitioners as well as the learned counsel appearing for the respondent.
4.The learned counsel for the petitioners would submit that the petitioners are not the drawers of the cheques and they have not actually participated in the business of the deceased and there is no legal liability to enforce against the petitioners. The learned counsel invited the attention of this Court by relyiing upon a decision of this Court in S.K.Real Estates and another Vs. V.S.Ahmed Meeran reported in 2002-Cr.LJ- 1689-Mad. It is a case, wherein, a private complaint was filed against the first accused, which is a proprietary concern and the second accused being the proprietor by name, the learned Judged has held as follows:-
"4.Section 141 of Negotiable Instruments Act deals with offences by companies and in the explanation it is stated 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. A proprietary concern is not a firm or company and hence Section 141 is not applicable. the proprietor is the person who does business but or trading convenience, business is done in the name of proprietary concern. Thus, proprietary concern is not an independent, legal and juristic entity having legal recognition in the eye of law and it can neither initiate proceedings not proceedings be initiated against it. In case of proprietary concern, the proprietor is always an affected person, who can either indict or be indicted."
5.It is also relevant to refer paragraph 10 of the judgment, which reads as follows:-
10. In this case, accused No.1 is the proprietary concern and accused No.2 is the proprietor and both the accused are one and the same person. Accused No.1 is not a legal entity or juridical person and the prosecution cannot be maintained against it. At the same time, the prosecution against accused No.2 is maintainable and can be continued. For the reasons stated above, the proceedings against accused No.1 are liable to be quashed."
6.The learned counsel also drawn the attention of this Court to the judgment of the Bombay High Court in Savita H.Sorle Vs. Rajesh Damidar Sarode reported in 2006 STPL(DC) 897 BOM, wherein it has been held as follows:-
Negotiable Instruments Act, 1881 - Section 138 and
139 - Vicarious liability - Wife and son of deceased drawer-Drawer is dishonored cheque died - Complaint filed against his wife and son - Process issued by magistrate - quashing application - Accused not responsible - Complaint without jurisdiction and abuse of process of Court - Complaint quashed with ordering compensation to be paid to accused by complainant.
7.The learned counsel, next invited the attention of this Court to an unreported judgment of the Rajasthan High Court in Draupadi Devi (A), Maya Sippi Vs. State of Rajasthan, wherein it has been held as follows: Negotiable Instruments Act, 1881, Sections 138 and 141 - Dishonour of cheque - Offence by firm - Accused died during proceeding - Legal heir cannot be proceeded unless it is shown that they were incharge and responsible to affairs of firm.
8.The learned counsel appearing for the petitioner drawn the attention of this Court to the judgment of the Andhra Pradesh High Court in Smt.Bupinder Lima Vs. State of A.P., wherein it has been held as follows:
"Criminal liability cannot be fastened on the heirs and the legal representatives of the person who is said to have been guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881.
Held accordingly, that the petitioners, the wife and daughters of the deceased drawer, could not be prosecuted for the offence under Section 138 of the Act for the alleged failure of the drawer in meeting the liability to pay the amount covered by the cheque which was dishonored in response to the notice sent by the payee.
9.On the other hand, the learned counsel appearing for the respondent would submit that the petitioners had obtained a sum of Rs.7,00,000/- along with one deceased Muthusamy on behalf of M/s.Muthukumaran Stores and in order to discharge all the debt, the cheques were issued. After the death of the proprietor of M/s.Muthukumaran Stores, his legal heirs has succeeded and therefore, the legal heirs are bound to honour the cheques. The learned counsel relied on the judgment of this Court in N.Anbarasu Vs. M.Ganesan reported in (2007-2.L.W (Crl.)880) for the proposition that new facts have come into picture on the basis of facts, the proceedings can be continued.
10.The respondent is the complainant in S.T.C.No.177 of 2008. It is alleged that on 27.11.2006, the petitioners approached the complainant with a request to give a loan for the business purpose and they gave three cheques drawn in favour of the complainant duly signed by one T.P.Muthusamy. According to the complainant, the said T.P.Muthusamy died on 12.12.2006 and the firm is now run by the second petitioner/A2 as its proprietor and the third petitioner/A-3, as Manager. As the cheques bounced with an endorsement 'Insufficient Funds', the complainant has issued notice and filed a private complaint under Sections 138 and 141 of the Negotiable Instruments Act.
11.Admittedly, the cheques were drawn by one T.P.Muthusamy, who was the proprietor of M/s.Muthukumaran Stores. As held in 2002-CrLJ-1689-Mad, (cited supra), the proprietary concern is not a legal entity, who can either indict or be indicted. The petitioners are proceeded with as they have inherited the said Muthukumaran Stores from the deceased T.P.Muthusamy, who was the drawer of the cheques. At the time of drawing of the cheques, the petitioners are neither partners nor incharge of the said concern.
12.The learned counsel for the respondent would submit that the petitioners came to the resident of the complainant and gave the cheques drawn by the deceased T.P.Muthusamy, which were later bounced and this fact still attract
Section 420 of I.P.C for cheating. It it his further contention that the judgments relied on by the petitioners are not relevant to the facts of the present case.
13 In my considered view, even assuming that they are the persons who delivered the cheques, it will not bind them as there is no legal liability for them against the complainant. The legal liability is only agaisnt one T.P.Muthusamy, who was the proprietor of the said Stores, which is non-exist in law. Thus, the proprietary concern is not an independent, legal and juristic entity having legal recognition in the eye of law and it can neither initiate proceedings nor proceedings be initiated against it. I have no doubt in my mind that the legal heirs cannot be prosecuted under section 138 of N.I.Act. If at all any claim is against them by the complainant, he has proceed only under the civil law for recovery of the amount against the properties in the hands of the legal heirs. Therefore, in my considered view, the complaint is misconceived and it is clear abuse of process of law. Under such circumstances, the proceedings in S.T.C.No.177 of 2008, on the file of the learned Judicial Magistrate No.1, Thoothukudi, are deserve to be quashed.
14.In the result, this petition is allowed accordingly and the proceedings in S.T.C.No.177 of 2008, on the file of the learned Judicial Magistrate No.1, Thoothukudi, are quashed.
MPK To
1.The Judicial Magistrate No.1, Thoothukudi.
2.The Addl.Public Prosecutor, Madurai Bench of Madras High Court, Madurai.