Skip to main content

Even An Unregistered Partnership Firm Can Maintain ‘Cheque Bounce’ Complaint

In M/s Uttam Traders Ranghri vs. Tule Ram alias Tula Ram, an appeal was filed before the Himachal Pradesh High Court solely on the ground that one of the partners of the complainant-firm which is an unregistered partnership concern, had failed to prove that he was one of the partners of the complainant-firm and duly authorised by it to file the complaint and acquitted the respondent.

The High Court decided that two questions arise for consideration in this matter :-

1) Whether acquittal by the magistrate solely on the ground that the managing partner of the appellant having failed to establish that he was one of the partners of the complainant-firm and duly authorised by it to file the complaint was correct
2) Whether a partner of an unregistered partnership firm can maintain a complaint under Section 138 of the Negotiable Instruments Act.

For the first issue, the High Court referred to M/s Haryana State Co.Op., Supply and Marketing Federation Ltd. vs. M/s Jayam Textiles, Samrat Shipping Co. Pvt. Ltd. vs. Dolly George &  M.M.T.C.Ltd. vs. Medchl Chemicals and Pharma (P) Ltd., wherein the Hon’ble Supreme Court held that the only eligibility criteria prescribed by Section 142 for maintaining a complaint under Section 138 is that the complaint must be by the payee or the holder in due course and once this criteria is satisfied as the complaint is in the name and on behalf of the appellant Company. Therefore, even presuming that initially there was no authority, still the company can, at any stage, rectify that defect at a subsequent stage, and the company can send a person who is competent to represent the Company. Based on these judgments, the High Court decided that appellant-applicant ought to be granted one chance to place and prove on record the partnership deed.

For the second issue, the High Court found that the law is not consistent as different views have been expressed by various High Courts. Save and except an isolated authority of the Division Bench of Andhra Pradesh High Court in Amit Desai’s case (supra), all other High Courts in the country, have categorically held that the proceedings under Section 138 of the N.I. Act, are not recovery proceedings. The High Court noted the judgment of the Supreme Court in R Vijayan vs. Baby wherein It provides a single forum and single proceeding, for enforcement of criminal liability (for dishonouring the cheque) and for enforcement of the civil liability (for realization of the cheque amount) thereby obviating the need for the creditor to move two different fora for relief. Therefore, even an unregistered Partnership firm can maintain a complaint under Section 138 of the Act.




Comments

  1. Harish2 June 2020 at 14:06

    Thanks for sharing the information with us.

    ReplyDelete
  2. Harish2 June 2020 at 14:08

    I would like to share my thoughts about partnership firm registration online. Partnership is the relationship between people who have agreed to share the profits of an undertaking carried on by all or any of them acting for everyone. This is one of the easiest ways of creating a legal body in which a party of 2 or more can do business.

    ReplyDelete

Post a Comment

Most viewed this month

Merits and the terms of contract are irrelevant for invoking of the bank guarantees

In Sabarkantha Annuity Pvt. Ltd. Vs. NHAI and Ors, the Petitioner filed before the Delhi High Court  petition under Section 9 of the Arbitration and Conciliation (Amendment) Act, 2015 with a prayer that, Respondents be restrained from acting upon the letter dated 15th September, 2017 or from invoking the Bid securities of the Petitioner to the tune of Rs. 10.93 Crores and also restraining the banks from honouring the invocation of said bank guarantees on behalf of Respondent No. 1 acting in terms of letter dated 3rd November, 2007. Petitioner has relied upon Clauses Nos. 9.1.1, 9.1.2 and 4.3 of the agreement dated 28th April, 2017 entered into between the parties to say the claim for damages since is not a claim for a sum presently due and payable and the respondent would be entitled to damages only on proof of loss, per Clause 4.3 of the agreement and hence is not entitle to the entire sum of bid security.  The Court found that Clause No. 9.1.2 speaks of an exclusiv...
Post a Comment
Read more

Right of pre-emption under West Bengal Land Reform Act

In Rabindra Nath Kundu & Anr vs Sudhir Hira, Bijoy Krishna Hira being the owner in the suit plot, gifted to Santosh Kumar Hira demarcated 11 decimals of land vide deed of gift dated 27.4.2004 and the latter sold 9 decimals out of 11 decimals of land to Sudhir Hira the preemptor/opposite party no. 1 and well demarcated 1.65 decimals of land in the said plot along with several other plots were sold, transferred and conveyed to the preemptees/petitioners herein by a registered deed of sale dated 10.8.2010, the subject matter of preemption. It is argued on behalf of the preemptees that  the present opposite party no. 1/preemptor Sudhir Hira has no relationship of co-sharership with Santosh Kumar Hira opposite party no. 2 as the demarcated portion of land has been purchased. It is settled principle of law that partial preemption is not permissible and this was what the view adopted by this Hon'ble High Court is Surendra Vs. Abhimannu reported in (1980) 1 Cal LJ 135 whe...
Post a Comment
Read more

CBI has no jurisdiction to probe affairs of medical college:HC

The Madras High Court has quashed charges against administrators of a medical college and dismissed CBI's petitions opposing discharge of officials of two other medical colleges, saying the investigation agency, or any other external agency for that matter, has no jurisdiction to probe the affairs of a medical college. Quashing the charges against the administrators of a medical college and dismissing CBI's petitions opposing the discharge of officials of two other medical colleges, Justice Aruna Jagadeesan said "contravention of rules and regulations may be an offence against the statute but is not a crime. There is no room or jurisdiction for any external agency to investigate the affairs of any medical institution coming within the purview of the Medical Council of India." In identical set of orders, all delivered on August 6, Justice Jagadeesan said "the shortfall in faculties and submissions of fake/forged documents would only disentitle the institution...
Post a Comment
Read more