A proprietary concern and its proprietor could be subject to prosecution under Section 138 to 142 of the Negotiable Instruments Act if the cheque issued by the proprietary concern or by its proprietor is dishonoured for insufficiency of funds.

The above criminal original petition has been filed under Section 482 of the Code of Criminal Procedure praying to call for the records in C.C. No. 624 of 2004 pending on the file of the Learned Judicial Magistrate No.II, Tiruvallur, and quash the same as against the petitioner.

2. The petitioner's case is that he had purchased petrol from the respondent petrol bunk for a total value of Rs.12,77,073.67; that out of the said sum, he has paid a sum of Rs.8,09,035/- and also issued a cheque for a sum of Rs.4,68,825/- and when the same was presented for collection, it was returned with an endorsement "stop payment"; that a legal notice was issued demanding the same amount on 12.9.2004 and the same was acknowledged by the petitioner; that since he failed to comply with the demand, a case has been filed under Section 138 of the Negotiable Instruments Act in C.C. No. 624 of 2004 on the file of the Judicial Magistrate No.II, Tiruvallur; that since the 1st accused is the proprietary concern and the 2nd accused is the proprietor and both the accused are one and the same, A1 is not a legal entity or juristic person and therefore, the prosecution cannot be initiated against it and hence, he has come forward for the relief extracted Supra.

3. Learned counsel for the petitioner submits that a proprietary concern is neither a firm nor a company so as to come within the ambit of Section 141 of Negotiable Instruments Act. A proprietary concern does not have a separate legal entity apart from its proprietor since the proprietary concern and the proprietor are one and the same person. He also relied on the decision reported in S.K. REAL ESTATES REP. BY ITS PROPRIETOR S.K.KRISHNAMOORTHY AND ANOTHER – Vs. - S. AHMED MEERAN (2002 (1) MWN (CRL) DCC (MAD.) 120) wherein it has been held that..

“Section 141 of Negotiable Instruments Act deals with offences by companies and in the explanation it is stated that 'company means any body corporate and includes a firm or other association of individuals' and director in relation to a firm means a partner in the firm. A proprietary concern is not a firm or company and hence Section 141 is not applicable. The proprietor is the person who does business but for trading convenience, business is done in the name of proprietary concern. Thus, proprietary concern is not an independent, legal and juristic entity having legal recognition in the eye of law and it can neither initiate proceedings nor proceedings be initiated against it. In case of proprietary concern, the proprietor is always an affected person, who can either indict or be indicted".

On such arguments, the learned counsel for the petitioner would seek to quash the proceedings in C.C.No.624 of 2004 pending on the file of the Judicial Magistrate No.II, Tiruvallur.

4. The case of the petitioner is that the petitioner purchased petrol from the respondent's petrol bunk for a total value of Rs.12,77,073.67 and he paid only a sum of Rs.8,09,035/- and for the balance of a sum of Rs.4,68,825/-, the petitioner issued a cheque in favour of the respondent and for bouncing of the cheque on account of stop payment ordered, thus, for not honouring the cheque by the bank of which the cheque is issued, the respondent has initiated the above proceedings under Section 138 of the Negotiable Instruments Act.

5. At the out set, the petitioner has not primarily made it clear as to who issued the cheque. There are two accused insofar as the complaint is concerned. The first accused is the petitioner herein and the second accused is its proprietor, who is not a party herein nor a petitioner in the above criminal original petition. It is not known as to who issued the cheque i.e. whether the first accused named in the complaint or the second accused/the proprietor of the first accused firm or the second accused for and on behalf of the firm.

6. It is an admitted fact that the petitioner issued the cheque. Without either being a juristic person or a legal entity, the petiti