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

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more