TaxTMI 
TaxTMI 
2026 (3) TMI 1058
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....he basis of complaint lodged by the opposite party No. 2. The allegations in the aforesaid complaint quoted the petitioner being a partner of a TV channel namely "C-Ren" advertised in the ABP inviting finance for creditable business and accordingly the Complainant/O.P. No. 2 invested Rs. 40,000/- through execution of an agreement dated 02.07.2001, inter alia, stipulating the complainant would be entitled @ 5% per month as profit on the aforesaid invested amount. Allegedly in discharge of the aforesaid liability the petitioner issued five postdated cheques including the cheque being no.607688 dated 16.04.2003 for Rs. 10,000/-. The said cheque was drawn on State Bank of India, Ramrajatala Branch, Howrah. It was alleged that the said Cheque was presented by the complainant at United Commercial Bank, Birati Branch on 11.10.2003. The said cheque was returned by the aforesaid Bank on the ground of "Funds Insufficient". Subsequently, a demand notice was served upon the petitioner but in vain. Consequently the proceeding under Section 138 Negotiable Instrument Act was initiated. 3. The petitioner after receiving summons appeared before the Learned Trial Court and was examined under Sect....
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....003 commenced on the basis of the second notice was barred under the Negotiable Instruments Act. The Learned Trial Court did not take into consideration the fact of second notice though the said previous notice dated 28.04.2003 had been marked as Exhibit-11 in the complaint case and the complainant admitted the same. Issuance of second notice resulted the complaint void ab initio. 9. On July 13, 2009, the Learned Judicial Magistrate, 5th Court at Barrackpore passed a Judgment and order whereby the petitioner had been convicted and sentenced to suffer rigorous imprisonment for three months and also sentenced to pay a fine amounting to Rs. 20,000/-. 10. In the aforesaid circumstances the petitioner preferred a Criminal Appeal being No.9 of 2009, before the Learned Additional District & Sessions Judge at Barrackpore, North 24 Parganas, challenging the judgment and order of conviction passed by the Learned Judicial Magistrate, 5th Court, Barrackpore. 11. In the present case the Learned Sessions Judge confirmed the judgment of trial court partly without considering the factual and legal aspect of the case. 12. The Learned Advocate representing the petitioner submitted as fol....
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.....-2) on the basis of which the complainant made the investment of Rs. 40,000/- was issued on behalf of "C-REN" and the petitioner signed as partner of "C-REN". In fact, in the said letter the complainant was invited to become a partner of "C-REN". e) Despite the basis of the alleged liability owed to the complainant being the transaction with the said partnership firm, the complainant did not issue any demand notice to the said firm (Ext.-10 and 11) nor did the complainant implead the said firm as party in the complaint case. f) Though the petitioner was a partner of the said firm and the cheque was issued by the petitioner, the liability allegedly owed to the complainant was that of the firm, and the proceeding under Section 138 of the Negotiable Instrument Act could not be maintained against the petitioner in his individual capacity. No order of conviction could have been passed against the petitioner in his personal capacity and without impleading or serving statutory demand notices upon "C-REN". g) The Learned Trial Court in the impugned judgment and order dated 13.07.2009 recorded in the first paragraph itself that the complainant's case was the peti....
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....rovisions need to be referred to. ... 51. We have already opined that the decision in Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] runs counter to the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted. ... 56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legis....
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....ability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely ....
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....e Court a solemn duty to examine whether the findings recorded by the Trial Courts suffer from patent illegality, perversity, or a failure to consider material aspects having a direct bearing on the administration of criminal justice. When a conviction results from such fundamental omissions, the Revisional Court cannot remain a silent spectator to the miscarriage of justice. 15. At the outset, it is necessary to notice that the entire substratum of the prosecution case rests upon the alleged investment made by the complainant in a partnership concern styled as "C-Ren". The materials on record unmistakably reveal the complainant herself asserted that a sum of Rs. 40,000 was invested in the said partnership enterprise on the basis of an agreement dated 2nd July, 2001. The promise of returns emanates from the said business venture. The documentary evidence relied upon by the complainant including the agreement and the contemporaneous correspondence acknowledging the investment also disclose that such transaction was entered into on behalf of the partnership firm. 16. Thus, the very foundation of the complainant's case attributes the alleged liability to the firm "C-Ren". The pe....
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....s an accused rendered the prosecution fundamentally defective. 21. What is particularly disquieting is, both the Trial Courts have recorded the complainant's case pertained to investment in the partnership concern "CRen", yet despite noting such a crucial aspect the Courts proceeded to affirm the conviction of the petitioner in his personal capacity without examining whether the statutory requirements governing prosecution of offences by partnership firms have been satisfied. Such a course betrays a clear non16 application of mind to the legal consequences flowing from the admitted facts. 22. Another aspect which merits consideration is the existence of a legally enforceable debt. The complainant admitted in her evidence that the entire transaction was with the partnership firm and the investment proceeded in relation to the business activities of that firm. Once such admission surfaces on the record, the presumption under Section 139 of the Negotiable Instrument Act cannot be treated as irrebuttable. The presumption is a rule of evidence and stands displaced the moment a probable defence emerges showing that the liability has not been of the accused personally. 23. The de....