A non-legal entity cannot initiate legal proceedings under Section 138 of the Negotiable Instruments Act.

One Saraswati Trading Company, through its Manager and Administrator-Patel Dalabhai Sonabhai is before this Court. In the memo of the revision application said Patel Dalabhai Sonabhai is described as applicant (original complainant) Prayer made in the revision application is:-

“6(b). To quash and set aside the order at Annexure-A dated 12-9-2006 passed by the Learned Additional Sessions Judge, Deesa at Banaskantha in Criminal Appeal No.30 of 2003.” The learned Additional Sessions Judge, Banaskantha at Deesa was pleased to allow the appeal against the judgment and order passed in Criminal Case No.749 of 2001 by the learned 2nd Joint Judicial Magistrate First, Dhahera (JMFC, for short) dated 1-10-2003, whereby the appellant was held guilty of offence under Section 138 of the Negotiable Instruments Act, 1881 (the Act, for short). The learned JMFC was pleased to hold that the accused-Chaudhari Govindbhai (Govabhai) Bechardas is guilty of an offence under Section 138 of the Act and a warded him 1 year's R.I., fine of Rs. 5,000/- and in default, further 3 months R.I.

The learned JMFC was pleased to order compensation under Section 357 of the Criminal Procedure Code ("the Code", for short) for a sum of Rs. 7,90,000/-.

2. The complaint is filed by the manager/administrator of a trading concern-‘Saraswati Trading Company.’ It is not the case of the complainant that the said Saraswati Trading Company' is a legal entity, it is neither a registered partnership firm nor a company registered under the Companies Act. It is also not registered under any other law, so as to acquire a status of legal entity in the eye of law. Once there is no status of legal entity, there is no question of such concern being recognized by the Court of law for adjudication of its rights. It is not the case of the complainant that 'Saraswati Trading Company' is a sole proprietorship concern and that the complainant is the proprietor of the concern. Patel Dalabhai Sonabhai has described himself as a manager and administrator of the said trading concern, meaning thereby that Pate 1 Dalabhai Sonabhai cannot have any personal interest in the affairs of Saraswati Trading Company, which is not a legal entity in the eye of law and therefore, it has no existence.

3. Mr. Virat G. Popat, learned advocate for the petitioner vehemently submitted that Agricultural Produces Market Committee, Dhanera has issued a licence in the name of Saraswati Trading Company. Xerox copy of the same is placed on record.

This certificate, issued by Agricultural Produces Market Committee, Dhanera cannot confer a status of legal entity on Saraswati Trading Company and therefore, it is of no help to the present petitioner-original complainant. If at all that licence confers any right on the complainant, the petitioner may enjoy the same. But so far as an enforcement of right in the Court of law of concerned, the same can be only in accordance with settled principle of law.

4. Under the Act for taking cognizance of an offence, provision is made, i.e. Section 142 of the Act. Clause (a) of Section 142 of the Act provides that, no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. It is true that cognizance can be taken on a written statement, filed or made by payee or the holder in due course, but then the condition precedent is that, payee or holder in due course must be a legal entity. Section 142 of the Act does not say that even if the payee or holder in due course is not a legal entity a complaint can be tiled by such entity or anybody on behalf of such entity.

5. Learned advocate Mr. Popat relied upon a decision of this Court in the matter of Geekay Exim (India) Ltd. & Ors. Vs. State of Gujarat & Anr., reported in 1997(3) GLR 2660 : [1998(4) ALL MR (JOURNAL) 8]. The learned advocate emphatically submitted that in paragraph No.7 of that judgment, the Court