Karnataka High Court
BEACON INDUSTRIES, BANGALORE - Appellant
Versus
ANUPAM GHOSH - Respondent
Decided On : 09-08-03
CRI.R.P. : 85 of 2002
NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 138 -Prosecution of drawer of a dishonoured cheque by an unregistered partnership firm -is there any bar under Section 69 of Partnership Act to prosecute for dishonour of cheque by an unregistered firm? No.
[K. Ramanna, J.] - It could be said that Section 69(2) of the Partnership Act is applicable only where the civil rights are invoked and not in criminal cases. Non-registration of the firm has no legal bearing on the criminal case. Hence the finding recorded by the Trial Court is totally incorrect and illegal and the same is liable to be set aside.
Cases Referred : AIR 1975 Kerala 144; 2000 Cri.L.J 2386; 2000 SCC (Cri) 538; 2002(4) Crimes 165
Followed: 1999 (4) Crimes 1998.
Private complaint against an unregistered partnership firm.
CRIMINAL PROCEDURE CODE, 1973 - Section 200, Indian Partnership Act -Section 69(2) and Negotiable Instruments Act, 1881 -Section 138 -Prosecution of a drawer of a dishonoured cheque by an unregistered partnership firm -is there any bar under Section 69 of Partnership Act to prosecute for dishonour of cheque by an unregistered firm? No.
[K. Ramanna, J.] It could be said that Section 69(2) of the Partnership Act is applicable only where the civil rights are invoked and not in criminal cases. Non-registration of the firm has no legal bearing on the criminal case. Hence the finding recorded by the Trial Court is totally incorrect and illegal and the same is liable to be set aside.
Cases Referred : AIR 1975 Kerala 144; 2000 Cri.L.J. 2386; 2000 SCC (Cri) 538; 2002(4) Crimes 165;
Followed: 1999 (4) Crimes 1998
Can an unregistered partnership firm be prosecuted for dishonour of cheque?
INDIAN PARTNERSHIP ACT, 1932 -
Section 69(2), Cheque issued to an unregistered partnership firm -dishonour of -is there any bar under the section on such firm to prosecute the drawer of the cheque? No. Only civil rights are barred.
[K. Ramanna, J.] - It could be said that Section 69(2) of the Partnership Act is applicable only where the civil rights are invoked and not in criminal cases. Non-registration of the firm has no legal bearing on the criminal case. Hence the finding recorded by the Trial Court is totally incorrect and illegal and the same is liable to be set aside.
Cases Referred : AIR 1975 Kerala 144; 2000 Cri. L.J 2386; 2000 SCC (Cri) 538; 2002(4) Crimes 165
Followed: 1999 (4) Crimes 1998.
( 1 ) THIS revision petition is filed by M/s. Beacon Industries against the order dated 18-11-2001 passed by the XII Additional Chief Metropolitan magistrate, Bangalore, in a private complaint under Section 200 of the cr. P. C. for the offence punishable under Section 138 of the Negotiable instruments Act, 1881.
( 2 ) THE case of the revision petitioner is that the partnership firm, represented by its partner, filed a complaint against the respondent for bouncing of a cheque. After receipt of the complaint filed by the revision petitioner, the Trial Court, after hearing the arguments, dismissed the complaint by holding that there is a bar under Section 69 of the Partnership act and that an unregistered firm cannot prosecute any person or a firm.
( 3 ) HEARD the arguments of both parties and perused the records. In this behalf the learned Counsel for the revision petitioner submitted that filing of a complaint by the partner of an unregistered firm is not a bar but it cannot file a civil suit. Therefore, the dismissal of the complaint at the threshold by the Trial Court is totally illegal and incorrect. In this regard the learned Counsel for the revision petitioner relied on a decision in Kerala Arecanut Stores v M/s. Ramkishore and Sons and another, wherein the Division Bench of that Court held that "the right of action available to an indorsee of a cheque who comes to hold the cheque in due course is based upon conferment on him by the statutory provisions contained in the Negotiable Instruments Act the right to sue the maker of the cheque and also the indorser. The right sought to be enforced does not arise from a contract and therefore the Bar under section 69 (2) will not operate in such a case".
( 4 ) ON the other hand, the learned Counsel for the respondent submitted that there is a specific Bar under Section 69 of the Partnership Act that a private complaint filed by the partner of the unregistered firm is not at all maintainable and that the Trial Court has rightly dismissed the complaint. In support of his contention the learned Counsel for the respondent relied on a decision in Mr. Amit Desai and Another v M/s. Shine Enterprises and Another, wherein the Division Bench of Andhra pradesh High Court held that:"negotiable Instruments Act (26 of 1881), Section 13 (2) Partnership Act (9 of 1932), Section 69 (2) Dishonour of cheque complainant partnership firm having business dealings with accused Firm not registered under Partnership Act as required under Section 69 (2) Suit cannot be instituted by it Debt against accused is not legally enforceable debt Complaint not maintainable". In order to appreciate the contention of both parties it is proper to cull out Section 69 (2) of the Partnership Act, 1932, which reads as under:"69. Effect of non-registration. (1 ). . . . . (2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the register of firms as partners in the firm". Even by plain reading of Section 69 (2) of the Partnership Act leaves no scope for doubt that what is barred by the said section is the institution of a suit to enforce a right arising from a contract or conferred by the partnership Act by or on behalf of any person suing as a partner in a firm against the firm, or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person in suit is or has been shown as a partner in the register of firms.
( 5 ) A careful reading of Section 69 (2) of the Partnership Act clearly shows that an unregistered partnership firm is barred from filing a civil suit and there is no bar as such to file a private complaint and it is purely criminal liability on the part of the person who has issued the cheque. Even if the cheque issued by a partner of an unregistered firm for legally recoverably debt or otherwise an
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