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Dishonour Of Cheque: Complaint Against Partnership Firm Not Maintainable Without Making The Firm An Accused: Madras HC

27 July 2019 7:37 AM GMT
Dishonour Of Cheque: Complaint Against Partnership Firm Not Maintainable Without Making The Firm An Accused: Madras HC
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Quashing the proceedings against the Petitioners, the High Court of Madras held that a complaint under Section 138 of the Negotiable Instruments Act, 1881 (the Act), cannot be maintained against the partners of a firm, without making the firm as an accused person.

The Respondent had filed a complaint against the Petitioners before a Judicial Magistrate, for an offence under the said provision for the dishonor of cheque worth Rs. 3,00,000 issued to him by the Petitioners. Consequently, the Petitioners filed a petition before the High Court to quash the criminal proceedings primarily on the ground that the said cheque in question was drawn on behalf of the partnership firm.

They contended that the complaint could not be maintained without issuing the statutory notice to the partnership firm and making the partnership firm as an accused in the complaint. The effect of non-registration of the firm could not lead to institution of criminal proceedings against its partners without making the firm a party. Reliance was placed on the combined reading of Section 141 and 69(2) of the Act. The bar to make an unregistered firm party to the proceedings was inapplicable since the word "suit" envisaged under Section 69(2) of the Act, could not be stretched to criminal prosecutions, they submitted.

Relying on the ruling of the Supreme Court in Aneeta Hada v. Godfather Travels and Tours Private Limited, 2012(5) SCC 661, Justice N. Anand Venkatesh held that a partnership firm can also be brought within the purview of Section 141 of the Act, and in such cases the firm must be made as an accused along with the other partners, in order to maintain a complaint for an offence under Section 138 of the Act. The court also agreed with the contentions of the Petitioners with regard to Section 69(2) of the Act. Accordingly, the court in exercise of its powers under Section 482 of Cr.P.C. quashed the criminal original petition.

Counsel for Petitioners was Advocate V. V. Sairam and for the Respondent Advocate V. S. Sivasundaram. 

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