Judicial Analysis Court Copy Headnote Facts Arguments Court observation

Advocates:
Counsel for the Parties:
For the Petitioner:M/s. S. Kar, Advocate.
For the Respondent:Mrs. P. Rathore, Advocate.

IMPORTANT POINT
Complaint for offence under Section 138 NI Act unregistered firm, payee of cheque is maintainable and is not barred by Section 69(2) of Partnership Act.

Headnote:Negotiable Instruments Act, 1881—Section 138—Partnership Act, 1932—Section 69(2) —Dishonour of cheque—Whether complaint by unregistered partnership firm, payee is maintainable? Yes.
       Held: Therefore, the moment cheque, in lieu of cash amount, is hand over the drawer stands liable either to pay the amount within fifteen days from the date of receipt of the demand notice, if the cheque is not honoured by the drawer’s bank or to face criminal action in the Court of law having jurisdiction to try cases under Section 138 of NI Act. The NI Act does not provide any bar for launching criminal prosecution against such erring drawer. The sub-section (2) of Section 69 of the Partnership Act debars a suit to enforce a right arising from a contract by or on behalf of a firm against any third party if the firm is not registered under the Act. The said provision relates to instituting a suit for enforcing a right arising from a contract. This does not debar initiating a criminal prosecution for launching criminal action as prescribed by the special statute. In view of the above, with due respect, I prefer to differ with the views expressed in the case of Amit Desai (supra) and agree with the decision held in the case of Indrajit Gogoi (supra) and in the case of Kerala Arecanut Stores (supra).
       In the light of the above discussion, I am of the considered opinion that the criminal prosecution initiated by the complainant against the present petition is not hit by Section 69 of the Partnership Act. Therefore, I find no sufficient ground to interfere with the impugned, order passed by the learned Magistrate, First Class. (Paras 11 and 12)