1-WP-3977-2018.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO. 3977 OF 2018
Laxman Karia ...Petitioner
Versus
Ashoka Pavallion Premises Co-operative
Housing Society
Through Secretary Rajan Aminbhavi & Anr. ...Respondents
….
Mr. Satyavrat Joshi Ms. Sayee Sawant i/by Vidhi Partners Advocate for
the Petitioner.
Mr. Manoj M. Gadkari, Advocate for Respondent No.1.
Mr. Arfan Sait, APP for the Respondent No.2 – State.
….
CORAM : PRAKASH D. NAIK, J.
DATE : 5th FEBRUARY, 2024.
P.C.:
1. The Petitioner challenges the order dated 16 th July 2018
passed by the learned Additional Sessions Judge-19, Pune in
Criminal Revision Application No.289 of 2017 setting aside order
dated 10th April 2017 passed by learned J.M.F.C. Pune.
2. Brief facts if complaint initiated by Respondent No.1 are as
under:
i) The complainant is a cooperative society registered
under Maharashtra Cooperative Society Act. The accused No.1
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is the partnership firm registered under partnership Act.
Accused Nos.2 & 3 were partners responsible for the day today
business activities of Accused No.1 firm such as execution and
registration of documents, surprising the development of the
properties, constructions of buildings thereon, collecting
consideration from purchasers, formation of society, execution
of final conveyance, appointing representatives for the firm
etc.
ii) The accused had undertaken the development of
property bearing C.T.S. Nos.18 & 21 at Pune within the limits
of Pune Municipal Corporation and constructed multi-storied
commercial complex thereon.
iii) During the construction of building, the accused
allotted various units in the building to the purchasers and the
possession was handed over to them. It was represented to
purchasers that accused firm had obtained the completion
certificate in respect of all units. It was promised that copies
of the Completion Certificates would be provided to
purchasers. However despite repeated request, completion
certificate was not furnished.
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iv) Unit purchasers made inquiry with the corporation and
found that the accused had not obtained completion certificate
in respect of many units in the said building. The possession
was handed over to the purchasers without obtaining
completion certificate.
v) The accused neglected to perform their part of
maintaining the building. The accused did not take steps for
the execution of conveyance Deed. Vide Demand Notice dated
13.06.2012 the complainant called upon the accused to obtain
completion certificate and convey the title of the property in
favour of complainant society.
vi) The accused had willfully neglected to obtain the
completion certificate in respect to many units in the building
and without obtaining it handed over possession of the units
to the purchasers by misrepresenting that they have obtained
the completion certificate.
vii) The accused committed the offence punishable under
Section 13 r/w Section 3 of Maharashtra Ownership Of Flats
Act, 1963 (MOFA Act). The accused willfully neglected to
convey the title of property. The accused failed to comply
Section 11 of the MOFA Act, 1963.
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viii) The accused Nos.2 & 3 being the partners of accused
No.1 are responsible for the day to day business activities of
Firm.
3. Verification statement of the complainant was recorded on
16.08.2013. Vide order dated 11.12.2013 process was issued
against the accused for offence under Section 3 (11) punishable
under Section 13 of the Maharashtra Ownership of Flats Act, 1963
(for short “MOFA Act”).
4. The Petitioner preferred an application for discharge before
the Court of learned J.M.F.C. under Section 245(2) of the Cr.P.C. on
09.12.2016. The application was opposed by complainant by filing
say on 20.12.2016. Vide order dated 10.04.2017, the learned
J.M.F.C. allowed the said application and the Petitioner was
discharged.
5. The Respondent No.1 challenged the said order before the
Sessions Court by preferring Criminal Revision Application No.289
of 2017. The revision application was allowed vide order dated
16.07.2018 and the order dated 10.04.2017 passed by the learned
Magistrate was set aside.
6. Learned Advocate for the Petitioner submitted that the
impugned order passed by the learned Sessions Judge is contrary to
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law. In the absence of any evidence to proceed against the
Petitioner, the order of discharge passed by the trial Court ought
not to have been set aside by the Sessions Court. The complaint
does not make out any offence. The Petitioner had resigned w.e.f.
26.12.2000. Extract issued by the Registrar of Firms fortifies the
fact of resignation. The complainant had sent a legal notice dated
13.06.2012 to accused No.1 and accused No.2. This notice was not
addressed to the Petitioner as the complainant was aware that at
the relevant time the Petitioner was not concerned with day to day
affairs of accused No.1. The complainant has relied upon the
agreement dated 23.03.2011 executed between accused Nos.1 & 2
on one side and one of the purchaser. The Petitioner is not
signatory to the said agreement. The complaint was filed after a
period of about 12 years from the date of resignation of the
Petitioner. Since the Petitioner ceased to be the partner of accused
No.1, he cannot be prosecuted vicariously for the acts of accused
No.1. No specific role as to the functioning of petitioner in
partnership Firm is attributed to Petitioner. The execution
proceedings between the same parties was challenged by Petitioner
before Hon’ble Supreme Court and by order dated 27.01.2020 the
said proceedings are stayed. The learned Magistrate has
considered the aspects of resignation of the Petitioner and by
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assigning reasons allowed the application for discharge. There was
no reason to interfere in the said order. The trial Court was
empowered to discharge the accused in exercise of powers under
Section 245(2) of Cr.P.C.
7. Learned Advocate for the Respondent No.1 submitted that
the complainant must be given an opportunity to prove their case
by adducing the evidence. The Court has limited scope to
discharge the accused in exercise of powers under Section 245(2)
of Cr.P.C. Prima facie case is made out against the accused. The
trial Court ought not to have allowed the application for discharge
on the basis of debatable issue which has to be urged during trial.
Although the Petitioner has claimed that he had resigned w.e.f.
26.12.2000. There are several documents on record which has to
be adduced in evidence during trial which shows that the Petitioner
had participated in the transaction of the accused No.1-firm. Even
after the purported resignation, the Petitioner has actively
participated in the affairs of accused No.1. It is not disputed that
the Petitioner was the partner of accused No.1-firm. Provisions of
Section 32(3) of Indian Partnership Act mandate that
“Notwithstanding the retirement of a partner from a firm, he and
the partners continue to be liable as partners to third parties for
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any act done by any of them which would have been an act of the
firm if done before the retirement, until public notice is given of the
retirement. The petitioner was a party to Agreement dated
31.12.2012 between Gopi Constructions and Rajashree Ravtani.
Petitioner was a party as partner of Gopi Constructions in
agreement dated 04.10.2002 in favour of Tarannum Jafar Shaikh.
In Index-II it is noted that the petitioner has represented as
partners of the firm. The copies of relevant documents are filed
alongwith reply by Respondent No.1. In the agreement it is
specifically stated that, it is an agreement for sale executed on
04.10.2002 between M/s. Gopi Constructions, through its partner
Laxman Karia (Petitioner). Documents clearly establish that
although the petitioner claims that he has retired form the firm on
26.12.2000, he continued to actively participate in the business of
the said Firm and execute and register or cause to be executed or
registered various Agreements as partner of the Firm. Only on the
basis of the statement of the Petitioner that he retired from the firm
with effect from 26.12.2000 he could not have been discharged
from the case. As per Section 14 of the Act, not only the partners
but every person who at the time of the offence committed was in
charge of and responsible to the firm for the conduct of business of
the firm shall be be deemed guilty of the offence and liable to be
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proceeded with. The complaint cannot be quashed at the threshold
when prima facie case was made out against the accused and the
process was issued against him.
8. The learned Sessions Judge while deciding the revision
application has considered the law relating to Section 245(2) of
Cr.P.C. and the documents on record and set aside the order passed
by the learned Magistrate which does not warrant interference.
9. The Petitioner was arraigned as accused No.3. In the
complaint filed by Respondent No.1 alleging offences under
Sections 3 (11) r/w Section 13 of the MOFA Act. The Petitioner
was impleaded as a partner of accused No.1-M/s. Gopi
Construction. It is not not disputed that the Petitioner was partner
of firm. The contention of the Petitioner is that he had resigned
w.e.f. 26.12.2000 and therefore cannot be held responsible for the
day to day affairs of accused No.1 post his resignation. The learned
Magistrate perused the complaint and documents and held that
prima facie case is made out for offences under Section 3, 11 r/w
Section 13 of the MOFA Act and issued process against the accused.
The Petitioner preferred an application for discharge primarily on
the ground that he had resigned from the partnership firm w.e.f.
26.12.2000. The Petitioner contends that the agreement between
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accused No.1 and Society/Complainant was executed after the
Petitioner had resigned from the partnership firm.
10. While adjudicating the application for discharge, the
complainant had brought to the notice of the Court that there are
documents on record which indicate that the Petitioner had
participated in the activities of accused No.1. It was also urged
that the Petitioner is partner and responsible for the day to day
business activities of the accused No.1-firm. It was also pointed out
that the agreement to sale dated 04.10.2002 was executed by the
accused No.1 and Tarannum Jafar Shaikh and Shaikh Mohammed
Taher Abdullah which shows that the Petitioner is one of the
partner of the firm. In the year 2013, the name of Petitioner was
seen on the documents on record executed by accused No.1-firm as
its partner. The Petitioner had executed Power of Attorney dated
01.10.2002, although it is contended that he had resigned w.e.f.
26.12.2000.
11. The learned Magistrate however observed that the complaint
was filed belatedly and that the certificate of resignation was issued
by the Registrar of Firms indicating that the Petitioner had resigned
from accused No.1-firm. Without considering the said documents
pointed out by the complainant which indicate that Petitioner had
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participated in activities of firm beyond the purported resignation.
The accused was discharged.
12. The learned Sessions Judge while allowing the revision
application has taken into consideration the scope of discharge at
the stage of Section 245(2) of the Cr.P.C. and the nature of material
against the Petitioner to proceed against him. The learned Sessions
Judge has also observed that the charge can be said to be
groundless when there is absolutely nothing to attract the charge or
involvement of the accused. The trial Court lost sight of Section 14
of the MOFA besides the concept of Partnership holding over.
13. Apart from averments in the complaint about Role of
Petitioner, there are documents to show participation of petitioner
in day to day business of accused No.1.
14. Section 245(2) of the Cr.P.C. no doubt empowers the Court to
discharge the accused. However, when prima facie case is made
out against the accused, the Court ought not to have discharged
him. The trial Court ignored the incriminating material brought to
its notice by the Advocate for complainant. Existence of several
documents relied upon by the complainant indicate that the
Petitioner had participated in the activities of accused No.1 beyond
the purported resignation. The claim of resignation is therefore
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debatable. As per the certificate of Registrar of Firm, the Petitioner
had resigned on 26.12.2000. As per the Index-II regarding deed
number 4756 of 2002, the name of Petitioner can be seen to be
appearing as partner of accused No.1. The said transaction is dated
04.10.2000. Another transaction with regards Deed number 257
of 2013 dated 31.12.2012 registered on 07.01.2013 disclose that
the Petitioner executed agreement in the capacity of partner of
accused No.1. Agreement dated 23.02.2011 indicate that the
Petitioner had acted as partner of accused No.1 to execute the
agreement.
15. The revisional Court in these circumstances observed that
the material before the trial Court was two fold. One is the
certificate of retirement dated 26.12.2000 and other is series of
transactions done by the Petitioner in the capacity of Partner of
accused No.1. In such situation prima facie there was material on
record indicating that the Petitioner though claimed to have retired
from the firm, continued to act as a partner of the firm. Thus he
continued to represent the partnership firm and there was no
denial from the side of the accused No.1. Thus, apparently it was
partnership holding over or an implied partnership. In such
circumstances when the Petitioner was found to be representing
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that he was a partner in the firm and continued to execute the
work of the partnership firm, he was binding to execute the work of
the partnership firm. He was active in the partnership business.
This would indicate that there was material on record regarding
which inquiry was necessary to be done by calling upon the
complainant to adduce evidence under Section 244 of Cr.P.C.
16. Learned Sessions Judge has rightly reversed the order passed
by the learned Magistrate. Prima facie there was material showing
involvement of the Petitioner. The trial Court ought not to have
entered into the debatable issue as the Court has limitations while
allowing the applications for discharge under Section 245(2) Cr.P.C.
I do not find any reason to interfere in the order passed by the
learned Sessions Judge. There are several documents to show the
involvement of the Petitioner, even post retirement as claimed by
the Petitioner. The Petitioner has apparently continued to represent
himself as the partner. Hence, Petition is devoid of merits and
deserves to be dismissed.
ORDER
i) Criminal Writ Petition is rejected and disposed off.
17. At this stage, the learned counsel for the Petitioner submits
that the interim relief granted by this Court may be extended by a
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period of eight weeks to enable the Petitioner to challenge the
order before the Higher Court. Learned counsel for the Respondent
No.1 opposed the said prayer.
18. Considering the fact that the interim relief was granted by
this Court and it was continued for long time, the same is extended
by a period of 8 weeks from today.
(PRAKASH D. NAIK, J.)
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