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. Thanks for sharing the information with us.

    ReplyDelete
  2. 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

Partition proceedings are vitiated even if single co-sharer is not made party or is not served in accordance with law

Cause Title :  Bhagwant Singh vs  Financial Commissioner (Appeals) Punjab, Chandigarh,  CWP-2132-2018 (O&M), High Court Of Punjab & Haryana At Chandigarh Date of Judgment/Order : 31.08.2022 Corum : Hon’ble Mr. Justice Sudhir Mittal Background A large parcel of land was owned by the Nagar Panchayat. Thereafter, some of the co-sharers sold their shares to third parties including the petitioners herein. On 22.11.1995, respondents No.3 to 5 filed an application for partition of the land. The petitioners were not impleaded as parties.  On completion of proceedings, sanad was issued on 28.08.1996. Vide two separate sale deeds dated 28.05.2008 respondents No.3 and 5 sold some portion in favour of respondent No.6 and 7. These respondents sought implementation of the sanad resulting in issuance of warrants of possession dated 05.06.2008. Allegedly, it was then that the petitioners realized that joint land had been partitioned and that proceedings h...

Power of Attorney holder can also file cheque bounce cases: Supreme Court

The Supreme Court has held that a criminal complaint in a cheque bounce case can be filed and pursued by a person who holds a power of attorney (PoA) on behalf of the complainant. A three-judge bench headed by Chief Justice P Sathasivam gave the "authoritative" pronouncement on the issue, referred to it by a division bench in view of conflicting judgements of some high courts and the apex court. "We are of the view that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the Negotiable Instruments Act (which deals with cheque bounce cases)," the bench, also comprising justices Ranjana Prakash Desai and Ranjan Gogoi, said. The bench, in its judgement, said, "...we clarify the position and answer the questions in the following manner: "Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal...

Christian who reconverts as Hindu SC will get quota benefits

Amid the controversy over “ghar wapsi”, the Supreme Court on Thursday ruled that a person who “reconverts” from Christianity to Hinduism shall be entitled to reservation benefits if his forefathers belonged to a Scheduled Caste and the community accepts him after “reconversion”. Citing articles by B R Ambedkar and James Massey, and reports by Mandal Commission and Chinappa Commission, the court said: “There has been detailed study to indicate the Scheduled Caste persons belonging to Hindu religion, who had embraced Christianity with some kind of hope or aspiration, have remained socially, educationally and economically backward.” The bench of Justices Dipak Misra and V Gopala Gowda held that a person shall not be deprived of reservation benefits if he decides to “reconvert” to Hinduism and adopts the caste that his forefathers originally belonged to just because he was born to Christian parents or has a Christian spouse. Expanding the scope of a previous Constitution benc...