IMPORTANT POINT
Where accused had signed loan agreement as managing partner of firm which had been provided loan then he was liable to be summoned as accused for dishonour of cheque issued by firm though signed by other partner.

Ranjit Singh, J.—Petitioner is a retired Colonel from Indian Army and is an unfortunate victim of mechanism of civil smart respondent, business person. He stands to loose his hard earned fortune of Rs. 25 lacs. He was deceived to loan, perhaps his entire saving of Rs. 25 lacs, to respondent No. 1 M/s. Patiala Auto Enterprises, Patiala. He appears to have been hooked by crooks well and proper. Enticed by respondent No. 3 Parkash Chand Bansal, the petitioner entered into an agreement (Annexure P1) with respondents, which is signed by respondent No. 3, posing himself to be a managing partner of respondent No. 1 M/s. Patiala Auto Enterprises, Patiala. Respondent No. 3 signed an agreement with the petitioner for accepting loan of Rs. 25 lacs which was to be the working capital of respondent No. 1 M/s. Patiala Auto Enterprises, Patiala. To secure this loan, even house, No. 22, Brar Street Patiala was hypothecated in favour of the petitioner (first party) as a collateral security on behalf of 2nd party i.e. the respondents herein. The parties had also mutually agreed that respondents would pay an interest @ 24% per annum or Rs. 300/- per scooter on number of scooters sold in one calendar month which was to be payable by the Second party i.e. respondents by 5th of each month to the First party i.e. the petitioner. While accepting this loan on behalf of respondent No. 1, respondent No. 3 posed himself as Managing Partner and took responsibility in all respect on behalf of every one as can be seen from the following averments in the agreement:-

“Having at the request Shri P.C. Bansal, Managing Partner of M/s. Patiala Auto Enterprises, Lower Mall, Patiala, hereinafter called the borrower of the Second Part which expression shall including its successor, administrators and assigns and Shri Bimal Kumar Jain, Smt. Anita Ram and Shri Amit Kumar, resident of 22, Brar Street, Patiala, hereinafter called the Guarantors of the Third Part witnesseth:”

2. Responsibility on behalf of the respondents, as such, was undertaken by respondent No. 3, who also is the lone signatory to this agreement on behalf of the respondent borrower. As can be seen, respondent No. 3 had signed as a borrower in this case. The respondents, however, failed to repay the loan and also did not adhere to the terms of the agreement Annexure P1. Not only that the house, which was hypothecated as a collateral security, was also sold in a clandestine manner by the guarantors etc. When the issue hotted up, the respondents allegedly issued a cheque amounting to Rs. 23.50 lacs on 30.9.2001 as re-payment of the loan amount. This cheque, drawn on the Bank of Punjab, was signed by respondent No. 2 as a partner of M/s. Patiala Auto Enterprises, Patiala. Cheque was on behalf of respondent No. 1 concern and not in individual capacity. The cheque, when presented by the petitioner, was not encashed and was returned with the remarks “insufficient funds”. The petitioner, thereafter, issued legal notice and failing to get response from the respondents, he filed a complaint under Sec. 138/142 of the Negotiable Instruments Act on 11.4.2002. Copy of the complaint is annexed with the petition as Annexure P2.

3. In support of his complaint, the petitioner appeared as a witness. Copy of the statement is on record as Annexure P3. On the basis of the Complaint and the evidence so given by the petitioner, the trial Magistrate summoned respondent No. 2 Sat Pal Bansal being partner of accused respondent No. 1 M/s. Patiala Auto Enterprises, Patiala to face prosecution under Sec. 138 of the Act. The petitioner felt aggrieved against the action of the trial Magistrate in not summoning respondent No. 3, who according to the petitioner, was the main person responsible for getting the loan and to secure the same despite being the one who was managing the affairs of respondent No. 1 concern. Initially the petitioner impugned this summoning order before the Court of Additional Sessions Judge, Patiala. The