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IN THE HIGH COURT OF CALCUTTA
Bibek Chaudhuri, J.
Tea Arcade - Appellant
Versus
Aparna Rai - Respondent
C.R.A 714 of 2018 & C.R.A 715 of 2018
Decided On : 10-06-2022
N.I Act - Dishonoured Cheques - Sections 138, 139, 118 - The court discussed the maintainability of a complaint by an unregistered partnership firm under Section 138 of the NI Act, the liability of a proprietorship firm and its proprietor, the requirement of notice under Section 138, and the presumption of existence of a legally enforceable debt or liability under Section 139. The court held that an unregistered firm can maintain a complaint under Section 138, and the liability of a proprietorship firm lies with its proprietor. It also emphasized the importance of properly serving the demand notice and the presumption of existence of a legally enforceable debt or liability under Section 139. The court's decision was influenced by the interpretation of these legal provisions.
Fact of the Case:
The appellant filed two complaints under Section 138 of the NI Act against the respondent for dishonoured cheques issued in discharge of debt. The trial court acquitted the respondent, stating the appellant failed to prove the cheques were issued in discharge of any legally enforceable debt or liability.
Finding of the Court:
The court found that an unregistered firm can maintain a complaint under Section 138, the liability of a proprietorship firm lies with its proprietor, and the demand notice must be properly served. It also emphasized the presumption of existence of a legally enforceable debt or liability under Section 139. The court held that the respondent had existing debt or liability and failed to rebut the presumption available to the complainant under Section 139.
Issues: The issues included the maintainability of a complaint by an unregistered partnership firm, the liability of a proprietorship firm and its proprietor, the requirement of notice under Section 138, and the presumption of existence of a legally enforceable debt or liability under Section 139.
Ratio Decidendi: The court's decision was influenced by the interpretation of the legal provisions, including the maintainability of a complaint by an unregistered partnership firm, the liability of a proprietorship firm and its proprietor, the requirement of notice under Section 138, and the presumption of existence of a legally enforceable debt or liability under Section 139.
Final Decision: The court set aside the judgment and order of acquittal and remanded both cases to the court below for recording conviction and sentence against the respondent.
JUDGMENT
Bibek Chaudhuri, J. - The complainant of Case No.0058948 of 2016 has filed the instant appeal being aggrieved by and dissatisfied with the judgment and order of acquittal passed by the learned Metropolitan Magistrate, 20th Court at Kolkata in a proceeding under Section 138 of the Negotiable Instrument Act (hereinafter described as N.I Act for short).
2. CRA 715 of 2018, is an appeal filed by the complainant of CS 0082901 of 2016 against the judgment and order of acquittal passed by the same court on 24th August, 2018.
3. As both the appeals are between the same party, this Court proposes to dispose of the above numbered two appeals by a composite judgment.
4. In CS 0058948/2016 filed by the appellant against the respondent alleging, inter alia, that for the discharge, in part of existing debt and liability the respondent issued a cheque on 15th December, 2015 for Rs.5 lacks drawn on ICICI Bank, Ballygunge Branch in favour of the complainant. The said cheque was dishonoured due to insufficient fund which was informed by the banker of the complainant, viz, State Bank of India, Park Street Branch on 22nd December, 2015. The complainant issued notice through its learned Advocate for demanding payment of the said amount within the statutory period of time as contained in Section 138(b) of the NI Act. The respondent in spite of receipt of notice failed to make such payment within 15 days thereof. So the complaint was filed by the complainant, being a partnership firm duly represented by the complainant.
5. CS 0082901 of 2016 is another complaint filed by the same appellant against the identical respondent under Section 138 of the NI Act alleging, inter alia, that in discharge of legally enforceable debt or liability, the respondent issued a cheque for Rs.5 lacks dated 15th March, 2016 drawn on ICICI Bank, Ballygunge Branch in favour of the complainant.
The said cheque was however dishonoured on the ground of insufficient fund on 16th March, 2016. Demand notice was issued through the learned Advocate for the appellant on 5th April, 2016. However, the envelopes sent to the accused in her addresses were returned with postal remark 'Not Known' on or about 6th April, 2016 which tantamount to good service. The learned Advocate for the appellant wrote a letter to the Director, G.P.O, Kolkata on 2nd May, 2016 requesting him to inform as to whether the notice upon the accused person on her two addresses were served or not. The Director, G.P.O replied on 4th May, 2016 that the envelopes containing demand notice were duly delivered upon the accused on 6th April, 2016. Since the accused failed and neglected to make payment of the amount involved in the cheque the complainant has filed the above numbered complaint.
6. Thus, in the above mentioned two appeals two numbers of cheques dated 15th December, 2015 and 15th March, 2016 were allegedly dishonoured and in spite of service of demand notice, amount involved in the cheque was not paid by the accused attracting the penal provision of Section 138 of the NI Act.
7. It is pertinent to mention at the outset that the complainant in both the cases is a partnership firm represented by them one Govind Singh Atwal, one of the partners of the said partnership firm. It is also not disputed that the respondents is the proprietor of Everest Business House. It is further ascertained from the evidence on record that the parties deal with the trading business of tea.
8. During trial the accused/respondent took the following defence:-
(i) The complainant firm being an unregistered partnership firm cannot lodge this complaint in the name of the firm against the accused No.2.
(ii) One of the partners also cannot initiate a complaint against the accused under Section 138 of the NI Act.
(iii) The complainant failed to prove any outstanding debt or liability of the accused to the complainant.
(iv) The cheques in question involved in the aforesaid two cases were not issued by the accused in discharge of lawful debt or li
For a conviction under Section 138, the complainant must prove both enforceable debt and properly served demand notice; failure to do so leads to acquittal.
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The main legal point established in the judgment is the presumption in favor of the holder under Section 139 of the NI Act, the rebuttable presumption of consideration under Section 118(a), and the r....
The failure to provide evidence of sending a legal notice under Section 138 of the Negotiable Instruments Act invalidates the complaint, leading to acquittal.
Point of Law : In case ingredients for filing complaint under Section 138 of NI Act are in existence, then presumption is there, as provided under law, and to rebut the same, definitely, evidence wou....
The main legal point established in the judgment is the presumption in favor of the holder under Section 139 of the Negotiable Instruments Act and the onus on the accused to raise a probable defense ....
The presumption of liability under Section 139 of the Negotiable Instruments Act can be rebutted if the accused proves non-receipt of the demand notice, which is essential for prosecution under Secti....
Admission of cheque execution triggers Sections 118/139 NI Act presumptions of debt; burden on accused to rebut by evidence; trial acquittal ignoring presumption and shifting onus to complainant is p....
The presumption under Section 139 of N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of i....
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