A proprietor of a sole proprietorship is liable under Section 138 of the Negotiable Instruments Act for dishonoured cheques issued under the firm's name, distinct from vicarious liability principles applicable in corporate entities.

JUDGMENT :

MANISH CHOUDHURY, J.

1. The petitioner has instituted these four criminal petitions under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 [ BNSS ] seeking setting aside and quashing of criminal proceedings of four complaint cases, viz., [i] N.I. Case no. 6098/2023, [ii] N.I. Case no. 6100/2023, [iii] N.I. Case no. 6106/2023 and [iv] N.I. Case no. 6101/2023 which are presently pending before the Court of learned Judicial Magistrate, First Class [JMFC], Kamrup [M] at Guwahati [‘the Trial Court’, for short]. The afore-mentioned complaint cases have been filed by the respondent no. 2, a partnership firm, as the complainant alleging commission of the offence under Section 138 of the Negotiable Instruments Act, 1881, as amended. For the purpose of appreciation of the common issues raised in these four criminal petitions, the criminal petition, Criminal Petition no. 915/2024 is taken as the lead case and the facts narrated therein are taken into consideration only as other than the cheques involved therein there are no significant distinctions and differences in the facts involved.

2. In the complaint filed in N.I. Case no. 6098/2023, the respondent no. 2- complainant has arraigned M/s L.I. Steel, a proprietorship firm, as accused no. 1 and the petitioner herein as accused no. 2. In the other complaint cases also, M/s L.I. Steel and the petitioner have been arraigned as accused. In all the complaint, the accused no. 2 is shown as the proprietor of the accused no. 1 proprietorship firm, M/s L.I. Steel.

3. In the complaint of N.I. Case no. 6098/2023, it has been asserted that the complainant is a partnership firm registered under the Indian Partnership Act having its principal place of business at Guwahati, Assam and it deals in sale and purchase of cement. The complainant for the purpose of the proceedings is represented by its authorized representative.

3.1. It is further asserted that the accused no. 1, M/s L.I. Steel is a proprietorship firm having its principal place of business at Imphal East, Manipur and the accused no. 2 is the proprietor of the accused no. 1, proprietorship firm. The accused no. 2 is a resident of Imphal East, Manipur. It is stated that during the Financial Years : 2020-2021 to 2022-2023, the complainant supplied cement to the accused on credit basis to the extent of Rs. 36,47,39,907/-. Against the cement so supplied, the accused made payments from time to time and the complainant had acknowledged to have received an amount of Rs. 33,94,25,173/-. According to the complainant, an amount of Rs. 2,53,14,734/- remained outstanding and receivable by them from the accused towards purchase of cements. It is further stated that another amount of Rs. 2,63,59,236/- had accrued towards interest for delayed payment till 07.08.2023. The complainant had, thus, projected that a total amount of Rs. 5,16,73,970/- remained as outstanding and receivable from the accused.

3.2. The complainant has further stated that as part-payment towards Rs. 5,16,73,970/-, the accused issued a cheque bearing no. 884310 dated 22.08.2023 [the subject-matter of N.I. Case no. 6098/2023] for an amount of Rs. 50,00,000/- in favour of the complainant from an account maintained at Imphal Branch of the State Bank of India.

3.3. The complainant has further stated that on presentation of the above cheque at its banker - HDFC Bank, Guwahati, Zoo Road Branch for collection, the same was returned unpaid by the banker of the accused citing reason, ‘Account Closed’ and the complaint received the cheque return memo from its banker on 23.08.2023. On receipt of information of dishonour, the comp