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Dabasree Das Baishnab Vcrsus F1 Multimedia Consultants

    Criminal Revision Petition Nos. 57, 58 and 59 of 2009

    Decided On, 28 October 2009

    At, High Court of Assam

    By, THE HONOURABLE MR. JUSTICE C.R. SARMA

    For the Appearing Parties: S. Kar, P. Rathor, Advocates.



Judgment Text

C.R. SARMA, J.

(1.) The limited question involved in this set of revision petitions is, whether in view of the provisions of sub-section (2) of Section 69 of The Indian Partnership Act, 1932 (hereinafter referred to as 'Partnership Act'), an unregistered firm can prosecute, under Section 138 read with Section 142 of The Negotiable Instruments Act, 1881 (hereinafter referred to as the 'NI Act') a drawer of a cheque issued against a liability and dishonoured for sufficiency of fund by the drawer's Bank.

(2.) As the said criminal revision petitions relate to the same parties, involving the similar question of law and facts, for the sake of convenience and brevity and as agreed to by the learned counsels appearing for both the sides, I propose to dispose of the above mentioned revision petitions by this common judgment and order.

(3.) I have heard Mr. S. Kar Bhowmik, learned counsel appearing on behalf of the revision petitioner as well as Mr. P. Rathore, learned counsel appearing on behalf of the respondent.

(4.) At the outset, let me set out the facts, in a nutshell, leading to the filing of the petitions aforesaid.

The respondent-complainant, an unregistered firm, as it then was, used to deal with computer furniture and accessories, inverters and computers etc. and Smt. Sujata Debnath (Das Bishnab), wife of Sri Uttam Das Baishnab, being the sole proprietor of "Ayush", a business organisation, purchased computer furniture and accessories etc. from the said respondent-complainant on different dates. The petitioner-accused Smt. Debashree Das Baishnab, being the sister-in-law of Smt. Sujata Debnath (Das Baishnab) aforesaid, issued in favour of the petitioner, cheque No. 010329 dated 16.4.07 for Rs. 1,00,000/-, cheque No. 010328 dated 16.4.07 for Rs. 36,000/- and cheque No. 010324 dated 16.8.07 for Rs. 36,000/- as the advance payment as well as final payment towards outstanding amount against the said purchase made by Smt. Sujata Debnath. The cheques aforesaid on being presented to the Bank of the respondent-complainant, were returned due to insufficiency of the fund in the account of the drawer i.e, the petitioner-accused herein. The respondent-complainant, after exhausting all the legal formalities including service of demand notice failed to receive any response from the accused-petitioner. Therefore, the respondent-complainant filed three complaints in respect of the each of the above mentioned three dishonoured cheques in the Court of learned Chief Judicial Magistrate, West Tripura, Agartala seeking prosecution of the revision petitioner as accused for the offence allegedly committed under Section 138 of the NI Act. Accordingly, the complaint in respect of the dishonoured cheque No. 010329 dated 6.4.07 for Rs. 1,00,000/- was registered as case No. NI/120 of 2007 under Section 138 of the NI Act, while the complaint in respect of dishonoured cheque No. 010328 dated 16.4.07 for Rs. 36,000/- and the complaint in respect of dishonoured cheque No. 010324 dated 16.8.07 for Rs. 36,000/- were registered as case No. NI/125 of 2007 and NI/40 of 2008 respectively. The learned CJM took cognizance under Section 138 of the NI Act in the above mentioned cases and transferred the said cases to the file of learned Judicial Magistrate, First Class, Agartala for disposal. The present petitioner, filed petitions in the said cases, pending before the learned Judicial Magistrate, First Class, challenging the maintainability of the proceedings on two grounds. Firstly, that the respondent-complainant being an unregistered partnership firm, in view of the provisions prescribed by the Section 69 of the Partnership Act could not file the proceedings under Section 138 of NI Act against the petitioner and secondly, the debt so far it relates to the said unregistered firm was not legally enforceable. The respondent-complainant contested the said claims of the petitioner by filing written objection, inter alia, stating therein that the provision of Section 69 of the Partnership Act was not applicable in a criminal case initiated under Section 138 of the NI Act and that the said liability was not legally unenforceable one.

(5.) Having heard the learned counsels of both the parties, the learned Judicial Magistrate, First Class by his order, dated 19.5.09, passed in the above mentioned criminal cases rejected the objection raised by the petitioner and held that the criminal proceedings initiated against the petitioner were maintainable.

(6.) Being aggrieved by the said orders dated 15.5.09 passed in NI case No. 120 of 2007, NI Case No. 125 of 2007 and NI case No. 40 of 2008, the petitioner has come up with the present revision petitions under Section 397 and 401 CrPC with a prayer for setting aside the impugned order dated 19.5.09 and also seeking discharge the petitioner from the liability of the cases aforesaid.

The criminal revision No. 57 of 2009 has arisen out of the NI case No. 120 of 2007, while criminal revision 58 of 2009 and 59 of 2009 have arisen out of the NI case No. 125 of 2007 and NI case No. 40 of 2008 respectively.

(7.) Mr. S. Kar Bhowmik, learned counsel appearing on behalf of the accused-petitioner, drawing my attention to Section 69 of the Partnership Act, more particularly to sub-section (2) thereof, has submitted that Section 69(2) of the Partnership Act debars an unregistered firm to enforce a right arising from a contract by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of firms as partners in the firm. It is contended, on behalf of the petitioner, that the complainant-respondent being an unregistered firm cannot initiate any criminal prosecution against the petitioner under Section 138 read with Section 142 of the NI Act. The other argument advanced on behalf of the petitioner is that the complainant being an unregistered firm the debt or liability created in favour of the complainant firm due to non-payment of the amount mentioned in the said cheques issued by the accused-petitioner, cannot be treated as legally enforceable debt or liability and as such the criminal prosecution initiated by the said firm was not maintainable in the eye of law.

(8.) Refuting the said contention, made on behalf of the petitioner, Mr. P. Rathore, learned counsel appearing for the respondent-complainant has submitted that the right to initiate a criminal proceeding under Section 138 read with Section 142 of the NI Act is a statutory right and that there being no bar under the NI Act for initiating criminal prosecution, in respect of the dishonoured cheques issued by the drawer, the present complaint cases were maintainable and that the learned Magistrate committed no illegality by refusing to discharge the complaint. It is also argued, on behalf of the respondent, that the cheques being received from the drawer against lawful transaction, the debt or liability created by the drawer was very much lawful and as such the same was legally enforceable as provided by the special law i.e. the NI Act. For the purpose of resolving the controversy raised in these petitions, I feel it appropriate to refer to the provisions of Section 69 (2) of the Partnership Act, which reads as follows:-

"No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm."

(9.) From a careful reading of Section 69(2) it appears that the said section prohibits institution of suits by or on behalf of an unregistered firm against a third party for enforcing the rights and liabilities arising from a contract. This Court in the case of Indrajit Gogoi Vs. Auto Sales and Service Station as reported in (2008) 3 GLR 440 while disposing a criminal petition filed under Section 482 CrPC observed as follows:-

"More importantly, nothing contained in Section 69, prohibits prosecution, in terms of Section 138 of the Act, by an unregistered firm, of a person, who may have issued a cheque addressed to such a firm, when such a cheque is dishonoured and, upon notice of demand for payment having been received by the drawer, the drawer fails to make payment. Considered, thus, it is clear that there was no bar, on the part of the present unregistered firm, to institute criminal prosecution against the petitioner, as accused, for dishonour of the said cheque."

(10.) Relying on the decision held in the case of Amit Desai Vs. M/s Shine Enterprises and Anr. reported in 2000 Crl. LJ. 2386, a Division Bench judgment of the Andhra Pradesh High Court, the learned counsel appearing for the petitioner has submitted that an unregistered firm cannot initiate action under Section 138 of NI Act. While deciding the case aforesaid, the Division Bench (supra) differed with the view taken by the Kerala High Court in the case of Kerala Arecanut Stores Vs. Ramkishore and Song : AIR 1975 Kerala 144 and held that the explanation to Section 138 of the NI Act specifically laid down that the debt or other liability means legally enforceable debt or other liability. It was observed by the Division Bench as under:-

"Enforcement of legal liability has to be in the nature of civil suit because the debt or other liability cannot be recovered by filing a criminal case and when there is a bar of filing a suit by unregistered firm, the bar equally applies to criminal case as laid down in explanation (2) of Section 138 of the NI Act."

In the case of Kerala High Cour (supra), it was held that a suit by a partner for recovery of money on dishonoured cheques endorsed in favour of the firm is not a bar. This was also the view taken by this Court in the case of Indrajit Gogoi (supra). For the sake of convenience and proper appreciation let me quote the provision of Section 138 of the NI Act as follows:-

"138. Dishonour of cheque for insufficiency, etc. of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."

(11.) The above statutory provision of the NI Act provides that if the drawer fails to make the payment of the amount mentioned in the cheque to the holder of the same, within fifteen days from the date of the receipt of the notice of demand, he shall be deemed to have committed an offence and shall be liable to be convicted and punished with imprisonment as prescribed by the Section 138. Therefore, it appears that failure of the drawer to pay the cheque amount after the said statutory period, creates criminal liability against him. This failure on the part of the drawer creates a right, in favour of the holder of such dishonoured cheque, in whose favour the same is issued, for initiating criminal prosecution before a Court not inferior to that of a Metropolitan Magistrate or a Judicial Magistrate, First Class, who shall have the power to try and punish the drawer under Section 138 of the NI Act. Therefore, the moment the cheque, in lieu of cash amount, is handed over the drawer stands liable either to pay the amount, within fifteen days from the date of receipt of the demand notice, if the cheque is not honoured by the drawer's Bank or to face criminal action in the Court of law having jurisdiction to try cases under Section 138 of NI Act. The NI Act does not provide any bar for launching criminal prosecution against such erring drawer. The sub-section (2) of Section 69 of the Partnership Act deb

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ars a suit to enforce a right arising from a contract by or on behalf of a firm against any third party if the firm is not registered under the Act. The said provision relates to instituting a suit for enforcing a right arising from a contract. This does not debar initiating a criminal prosecution for launching criminal action as prescribed by the special statute. In view of the above, with due respect, I prefer to differ with the views expressed in the case of Amit Desai (supra) and agree with the decision held in the case of Indrajit Gogoi (supra) and in the case of Kerala Arecanut Stores (supra). (12.) In the light of the above discussion, I am of the considered opinion that the criminal prosecution initiated by the complainant against the present petition is not hit by Section 69 of the Partnership Act. Therefore, In find no sufficient ground to interfere with the impugned order passed by the learned Magistrate, First Class. (13.) In the result, the above mentioned criminal revisions should fail and accordingly, those are dismissed. In order to avoid unnecessary delay in disposal of the cases, the parties to the criminal petitions are hereby directed to appear before the learned Judicial Magistrate, First Class on 20.11.2009 and upon their appearance, the learned Magistrate shall proceed with the matter in accordance with law. A copy this order be furnished to the learned trial Judge. Send down the lower Court records.
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