TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1994
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....cused is a partnership firm by the name of Vainqueur Corporate Services. 4. The third Accused is the managing partner. The first Respondent, who is arrayed as the second accused, is a partner of the firm. The complaint alleges that the partnership firm was dealing in data entry work. After obtaining contracts for data entry, sub-contracts were entered into by the firm for the completion of the assignments. Paragraphs 1 to 7 of the complaint are material to the controversy in the present case and are extracted below: 1. That the Accused No. 3 is the Managing Director and Accused No. 2 is one of the partners of M/s. Vainqueur Corporate Services situated at Hyderabad and dealing in data entry work. They used to take contracts of data entry and give sub contracts to others to complete said assignment. 2. The Accused persons have given sub contract of data entry to the complainant in the month of August 2010 by taking a caution deposit of Rs. 1,00,000 which has paid through two cheques which were credited into their account No. 304011014832 at ING Vysya Bank on 30.08.2010. Thereafter, they have assigned the job of data entry to the complainant from the month of September 2010 to Dece....
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....ment of cheques amount along with entire due amount but they have avoided the complainant. In paragraph 8 of the complaint, there is an averment that a notice of demand was issued within 30 days of the dishonour of the cheque on 1 August 2011 in spite of which payment was not made. 5. The complaint was instituted on 19 September 2011 before the Special Judicial Magistrate First Class, Mahabubnagar. Non-bailable warrants were issued against the first Respondent as he failed to appear in the proceedings. The warrants were recalled. The first Respondent instituted proceedings Under Section 482 of the Code of Criminal Procedure. The High Court quashed the proceedings by its impugned judgment and order. 6. The High Court held that the averments contained in paragraph 5 of the complaint were not sufficient to implicate criminal liability upon the first Respondent for an offence punishable Under Section 138. It is this view of the High Court which falls for consideration in the present appeal. 7. Ms. Bhabhna Das, learned Counsel appearing on behalf of the Appellant submits that the High Court was manifestly in error in quashing the complaint. Besides relying on the decision of this Co....
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....ed that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. The explanation to the Section is in the following terms: Explanation-For the purposes of this section- (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm. 10. In terms of the explanation to Section 141, the expression "company" has been defined to mean any body corporate and to include a firm or other association of individuals. Sub-section (1) of Section 141 postulates that where an offence is committed Under Section 138 by a company, the company as well as every person who, at the time when the offence was committed, was in charge of and was responsible to the company for the conduct of the business shall be deemed to be guilty of the offence. 11. In determining as to whether the requirements of the abov....
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....nsufficient 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....