A proprietor can file a complaint under Section 138 of the Negotiable Instruments Act on behalf of a proprietary concern, as they are not separate legal entities.

ORAL JUDGMENT

This appeal is filed by the appellant/complainant challenging the judgement of acquittal of the respondent/accused dated 20.08.2022 passed by I Additional Senior Civil Judge and JMFC, Bagalkot in C.C.No.677/2021, wherein, respondent-accused has been acquitted for offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘138 of N.I. Act’, for short).

2. The case of the appellant/complainant in brief is as under:

The complainant is running a hotel business at Bagalkot. During the course of hotel business respondent/accused was acquainted with complainant. In pursuance of such acquaintance, accused availed a loan of Rs.2,25,000/- from the complainant on 23.11.2018 for which a loan document is executed by the accused. But accused did not repay the said loan amount as agreed. On demand made by the complainant, accused has issued a cheque bearing No.167191 for Rs.2,25,000/- drawn on Axis Bank, Bagalkot branch dated 05.02.2019 in favour of the complainant for repayment of the loan amount. Complainant presented the said cheque for encashment on 05.02.2019. The said cheque came to be returned dishonoured. Thereafter, the complainant has issued legal notice dated 07.02.2019 and it came to be served on the accused on 28.02.2019. Inspite of service of notice, accused did not pay the cheque amount and therefore, appellant/complainant filed private complaint against respondent/accused for offence under Section 138 of N.I. Act.

3. The learned Magistrate has taken cognizance and registered C.C.No.677/2021 against the respondent-accused for offence under Section 138 of N.I. Act. The plea of the accused has been recorded. The appellant-complainant in order to prove his case, has examined himself as P.W-1 and got marked five documents as Exs.C-1 to C-5. The statement of the respondent-accused has been recorded under Section 313 of Cr.P.C. The respondent has not led any defence evidence. The learned Magistrate after hearing the arguments on both sides, has formulated points for consideration and passed impugned judgement of acquittal. The said judgement of acquittal has been challenged by the complainant in this appeal.

4. Heard learned counsel for the appellant. Inspite of service of notice, respondent remained absent and unrepresented.

5. The learned counsel for the appellant would contend that the trial Court has only considered the aspect that the payee is Raghavendra Hotel, Bagalkot and the complaint has been filed by one Sri. Shankar Ram Gudimani and he is not the payee of the cheque.

6. He further submitted that the trial Court has failed to take into consideration that the complainant is a proprietor of Raghavendra Hotel, Bagalkot and same has been stated in the cause title of the complaint. The trial Court erred in relying upon the decision of Hon’ble Apex Court in the case of National Small Industries Corporation Limited V/s State NACT, Delhi and Others in Criminal Appeal No.1802/2018, wherein, the Hon’ble Apex Court has considered whether company is a necessary party or not. The said decision is not applicable to the case on hand as the appellant/payee is not a company but it is a proprietary firm. He places reliance on the decision of this Court in the case of Shri. Baburao V/s Shri. S.M. Ravindrashetty, [MANU/KA/0937/2024], on the point that if payee is the proprietary concern, the proprietor can file complaint while describing as sole proprietor of proprietary concern.

7. He further submits that the trial Court has not gone into the merits of the case of the appellant. Therefore, the matter requires to be remanded to the trial Court for considering the case of complainant on merits. With this, he prayed to allow the appeal and remand the matter to the trial Court.

8. Having heard learned counsel, this Court has perused impugned judgement and trial Court records. Considering the grounds urged, the following point arise for consideration:

i. Whether the trial Court has erred in acquitting