A sole proprietorship cannot be prosecuted under Section 141 of the N.I. Act unless the proprietor is named in the complaint; the complaint was also quashed for being premature.

JUDGMENT :

Arun Kumar Singh Deshwal, J.

1. Heard Sri Byas Kr. Prasad, Advocate holding brief of Sri Pradeep Kumar Keshri, learned counsel for the applicant, Sri Khwaja Shamshad Ahmad, learned counsel for opposite party No.2 and Sri Pankaj Saxena, learned A.G.A. for the State.

2. The instant application has been filed seeking quashing of the entire proceeding of Complaint Case No. 4501 of 2021 (Parvinder Singh vs. Mahadev Enterprises), under Section 138 N.I. Act, P.S. Hapur Nagar, District Hapur, pending before C.J.M., Hapur as well as the impugned summoning order dated 14.9.2021.

3. The facts giving rise to the present case are that Rs.20,50,000/- was given by opposite party No.2 to the applicant as loan in June, 2020 on persuasion of the applicant and co-accused to obtain contract in the name of the firm Mahadev Enterprises and just to return that amount a cheque of Rs.29,50,000/- dated 6.1.2021 was given by the applicant on behalf of his proprietorship concern (Mahadev Enterprises) to opposite party No.2 but on presenting the same before the bank, the same was dishonoured on 15.1.2021 and it was again presented before the bank on the advice of the applicant on 29.1.2021 but the same was dishonoured by the bank on 30.1.2021 with the endorsement "payment stop by drawer". Thereafter, that cheque was again presented (third time) before the bank on the advise of the applicant on 23.2.2021 but the same was again returned by the bank on 24.2.2021 with the endorsement "payment stopped". Thereafter, opposite party No.2 sent a registered demand notice to the applicant on 4.3.2021 which was delivered to the applicant on 9.3.2021, but despite expiry of 15 days, the cheque amount was not paid then the impugned complaint was filed in which the applicant was summoned by order dated 14.9.2021.

4. This matter was heard on 19.11.2024 and on that date learned counsel for the applicant has submitted that the cheque in question was issued on behalf of the proprietorship concern of the applicant (Mahadev Enterprises) but the applicant was summoned despite the fact that the applicant was not impleaded as accused in the complaint, therefore, the proceeding against the applicant is barred by Section 141(1) N.I. Act as the proprietor of business concern cannot be prosecuted unless he is made party in the complaint and specific averment is made in the complaint that the proprietor was incharge of and responsible for the day to day business of the proprietorship concern. After hearing the above argument, this Court framed a question whether a sole proprietorship concern will come within the definition of “company” in Explanation (a) to Section 141 N.I. Act.

5. Learned counsel for the applicant also submitted that in respect of the cheque in question of Rs.20,50,000/-, the applicanbt has already paid Rs.4 Lakh through a cheque No. 000858 dated 12.7.2021. It is further submitted that on bouncing of the cheque of Rs.4 Lakh, which is a part payment of Rs.20,50,000/-, in respect of the cheque in question, another complaint No. 4501 of 2021 has been filed by the applicant, therefore, for one liability applicant is pursuing two cases; first the present impugned complaint and another being Complaint Case No. 4501 of 2021. Therefore, the proceeding deserves to be quashed.

6. One more submission was also advanced by the counsel for the applicant that admittedly as per the complaint, the demand notice was served upon the applicant on 9.3.2021 but the impugned complaint was filed on 22.3.2021 before 15 days from the date of service of the demand notice, therefore, the complaint is premature.

7. Learned counsel for the applicant also fairly submits that in the case of M.M. Lal vs. State of N.C.T. of Delhi and others, Criminal Leave Petition No. 290 of 2010 decided on 14.9.2012, the Single Bench of the Delhi High Court has observed that the sole proprietorship firm would not fall within the meaning of partnership firm or association of individuals.

8. However, learned counse