A partner cannot be held liable under Section 138 of the NI Act without the partnership firm being arraigned as an accused, reaffirming the necessity of a separate legal entity in cheque dishonour cases.

JUDGMENT

Jyoti Singh, J. (Oral) - Present appeal has been filed by the Appellant under Section 378 Cr.P.C. assailing order dated 22.11.2013 passed by learned MM (South)-01, NI Act, Saket Courts, Delhi in CC No. 550/1 titled `M/s Shalimar Paints Ltd. v. M/s National Marble & Sanitary Store'. Appellant/M/s. Shalimar Paints Ltd. was the Complainant before the Trial Court while Respondent No.1/M/s. National Marble & Sanitary Store was the accused. Respondent No.2 herein/M/s. National Marble & Sanitary Store VV was not arrayed as a party before the Trial Court. For the sake of convenience Complainant is referred to as the Appellant while accused is referred to as the Respondent hereinafter and Respondent No.2 is referred to as M/s. National Marble & Sanitary Store VV.

2. Appellant Company M/s. Shalimar Paints Ltd., which is a limited company and Respondent/M/s. National Marble & Sanitary Store, which is a partnership firm, of which Anil Khosla is a partner, entered into a business transaction, whereby Appellant supplied some paint products to Respondent. Appellant is in the business of manufacturing paints and other products and Respondent was one of its distributors, to which products were sold on credit basis. It is the case of the Appellant that in order to discharge its part liability, Respondent issued two cheques dated 18.11.2008 (Ex. CW/B1) and 28.11.2008 (Ex. CW1/B2) for Rs.1,00,000/- and Rs.1,04,124/- respectively, both drawn on Canara Bank, Malviya Nagar Branch, New Delhi and when the cheques were presented for encashment, they were dishonoured and returned back vide return memo dated 24.05.2009, (Ex.CW1/C), with the remark `Exceeds Arrangement'. Legal notice (Ex.CW1/D) dated 18.05.2009 was sent by the Appellant, which was duly served on the Respondent through speed post (Ex.CW1/D), but Respondent failed to make payment within the statutory period of 15 days from the date of receipt of the notice, leading to filing of the complaint by the Appellant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the `NI Act').

3. After summons were served on the Respondent, notice was framed on 13.05.2011 and on plea of `not guilty', the trial commenced. Authorized Representative (`AR') of the Appellant examined himself as CW-1 on 09.11.2011 and tendered his evidence by way of affidavit, reiterating the contents of the complaint and relying upon documents filed at the stage of pre-summoning evidence. In his cross-examination, CW-1 admitted that neither the statement of account nor any bill or invoice had been placed on record to support the transaction between the parties albeit he denied the suggestion that Respondent had to recover Rs.16,24,038.56/-. Appellant's evidence was thereafter closed and statement of Accused was recorded under Section 313 Cr.P.C. on 13.01.2012, wherein he stated that the cheques in question were issued towards advance payment against purchase orders and that it was the Appellant, who owed money to M/s. National Marble & Sanitary Store VV to the tune of Rs.16.24 lacs. Appellant misused the cheques and filed a false and frivolous complaint.

4. Anil Khosla examined himself as defence witness (DW-1) on 04.05.2012, wherein he stated that Respondent Firm i.e. `National Marble & Sanitary Store' was functional till March, 2006, after which `National Marble & Sanitary Store VV' was dealing with the Appellant Company. He deposed that no amount was due to the Appellant and this was reflect