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HELD: Criminal proceedings could have been quashed as against those partners against whom no averments necessary to rope them were made in the complaint, but not against the firm and its authorized signatory who signed the cheque in that capacity – Order of High Court modified accordingly – Negotiable Instruments Act, 1881 – s.141 – Constitution of India, 1950 – Articles 226 and 227. SMS Pharmaceuticals Ltd. vs. Neeta Bhalla and ANOTHER 2005 (3 ) Suppl. SCR371 = (2005) 8 SCC 89 – relied on. Case Law Reference: 2005 (3 ) Suppl. SCR371 relied on para 6 Subramonium Prasad for the Appellant. Ravindra Keshavrao Adsure, Rana S. Biswas, Mirdul Chakraborty and Sarla Chandra for the Respondents. Act: Code of Criminal Procedure, 1973: s. 482 – Quashing of criminal proceedings – Complaint u/s 141 of Negotiable Instruments Act against a firm and its partners Citation: 2008(12 )SCR110 ,2008(8 )SCC278 ,2008(11 )SCALE389 ,

The supreme court of india. Taken about 170 m ...

The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

(Arising out of S.L.P. (Crl) No.618/2007)
M/s Green Earth Asphalt & …Appellant
Power P. Ltd.
State of Maharashtra Tr. …Respondents
P.S.O. & Ors.
Leave granted.
This appeal is directed against the judgment and order dated
12.7.2006 passed by the High court of Judicature at Bombay, Nagpur Bench, Nagpur
in Criminal Application No. 873 of 2006 whereby and whereunder the application
filed by the respondents herein under Section 482 of the Code of Criminal Procedure
and Articles 226 and 227 of the Constitution of India for quashing the Summary
Criminal Case No. 72/2005 pending before the Court of Judicial Magistrate, First
Class, Acjhalpur was allowed.
The High Court in its judgment opined that in terms of Section
141 of the Negotiable Instruments Act only those partners of a Firm can be
proceeded, who were in-charge of the affairs of the Company and responsible to it. No
exception can be taken to the aforesaid proposition of law. No exception can also be
taken to the observations of the High Court that every partner of the Firm cannot
automatically be roped in.
But then the High Court despite the aforesaid observations has
quashed the entire criminal proceeding,
inter alia, on the premise that no averment in terms of Section 141 of the Negotiable
Instruments Act has been made in the complaint petition.Section 141 of the Negotiable Instruments Act raises a legal
fiction in terms whereof the Directors of a Company which would include the
partners of a Firm would be deemed to have committed an offence along with the
Company if they are in-charge of the affairs of the Company and responsible to it.
It is not in dispute that the respondent No.3 was the authorised
signatory of the Company and in that capacity he has signed the cheque. Respondent
No.2 is the Firm.
In that view of the matter the averments which were necessary
to be made to rope in respondent Nos. 4 and 5 herein having not been made, the
criminal proceeding could have been quashed against them but not against the
respondent Nos. 2 and 3. This aspect of the matter is squarely covered by a decision of
this Court in S M S Pharmaceuticals Ltd. Vs. Neeta Bhalla and Anr. -(2005) 8 SCC
For the aforesaid reasons, the appeal is allowed in part. The
judgment of the High Court is set aside so far as involvement of respondent Nos. 2
and 3 is concerned. However, the judgment of the High Court is upheld so far as
respondent Nos. 4 and 5 are concerned.
New Delhi,
August 13, 2008.


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