A proprietorship concern can be prosecuted under Section 138 of the Negotiable Instruments Act, and the complaint is maintainable if the payee or holder of the cheque in due course is competent to institute the complaint.

R.C.Kathuria, J.

1. In this petition, the petitioner seeks quashing of complaint (Annexure P-l), summoning order dated 20.4.1998, copy of which is Annexure-P.2, whereby the petitioner had been directed to appear in the Court to face trial in complaint filed under Section 138 of the Negotiable Instruments Act, 1981 (hereinafter referred to as the Act) read with Section 420 of the Indian Penal Code and the order dated 20.8.2001 (Annexure-P.5) whereby application filed by the petitioner under Section 245 of the Code of Criminal Procedure, 1973 (hereinafter referred to as the Code) seeking dismissal of the complaint was rejected.

2. The essential facts to focus the controversy involved in the present petition need to be noticed. M/s B.C. Brothers, Link Road, Ludhiana through its Proprietor, Bharat Bhushan, respondent in the present petition, filed a complaint under Section 138 of the Act read with Section 420, I.P.C. on the allegation that the petitioner had issued a cheque dated 25.8.1997 for Rs. 22,000/- in favour of the complainant-respondent. When the cheque was presented to the Bank, the same was returned unpaid with the remarks that funds were insufficient to honour the cheque. Thereafter, the cheque was again dishonoured on the ground of insufficiency of funds. In support of the allegations made in the complaint, Bharat Bhushan appeared as PW-1. He produced on record cheque Ex. P. 1, memos Ex. P.2 and Ex. P.3, copy of notice Ex. P.4, postal receipt Ex. P.5, and A.D. Ex. P,6. In addition, Prem Nath, Record Keeper, State Bank of India, (PW-2) was examined, who proved the certified copy of messenger book Ex. PW 2/A, copy of dishonouring of cheque register Ex. PW2/B and certified copy of statement of accused Ex. PW2/C. On the basis of above evidence, the Additional Chief Judicial Magistrate, Ludhiana, as per order dated 20.4.1998, found sufficient ground against the petitioner-accused to face trial in respect of the offences stated in the complaint.

3. On appearance before the Court, the petitioner moved an application under Section 245 of the Code on the ground that the petitioner, which is proprietorship concern, has no legal entity nor it is a juristic person and for that reason proceedings could not be initiated against its name in terms of the provisions of Section 11 of the Indian Penal Code read with Section 3(42) of the General Clauses Act and for that reason complaint being not maintainable was liable to be dismissed. This application was contested by the respondent on the ground that the complaint has been filed by M/s B.G. Brothers as proprietors of the respondent and for the reason it was maintainable. The application was dismissed vide order dated 20.8.2001. Aggrieved by these orders, the present petition has been filed.

4. I have heard learned Counsel for the petitioner at length.

5. Learned Counsel for the petitioner sought quashing of the complaint on the grounds stated in the application filed under Section 245 of the Code which have been noticed earlier. In support of the stand taken, reliance was placed on the observations made in Sri Sivasakthi Industries v. Arihant Metal Corporation, I (1993) BC 120=1992(2) All India Banking Law Judgments 20, wherein it was observed as under :

"Proprietary concern is not a firm. A firm is a partnership firm consisting of partners. In this case, the first accused is not a firm. It is only a proprietary concern. As such Section 141 of the Negotiable Instruments Act, which enables prosecution against the company as well as other person who at the time of the offence was committed was in charge of and was responsible to the company, cannot be pressed into service. The learned Counsel for the respondent was totally under an erroneous impression that the first accused is a firm. There is basic and fundamental difference between a firm and a proprietary concern. The first accused is only a proprietary concern, its proprietor being Raman. Accused 1 and 2 are one and the sam