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Issues:
1. Whether the petitioners can be held liable under Section 138 of the Negotiable Instruments Act for dishonored cheques issued in pursuance of a compromise. 2. Whether all petitioners, including those not directly involved in issuing the cheques, can be made liable under Section 138 of the Act. 3. Whether the liability of the proprietor of a proprietary concern extends to joint and several liability with the concern itself. Issue 1: The first respondent filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioners, alleging non-payment of the agreed amount despite cash payment and dishonored cheques issued as per a compromise. The petitioners sought to quash the proceedings, arguing that the amount was already paid and that the cheques were drawn on behalf of a proprietary firm not made an accused. However, the court held that the dishonor of the cheques and the issue of existing liability were matters for trial, not for quashing proceedings. As the complaint disclosed the necessary ingredients for an offense under Section 138, the court rejected the petitioners' contentions. Issue 2: The first respondent contended that all petitioners were liable since they collectively owed the amount and cheques were issued by the first petitioner on behalf of all three. The court disagreed, stating that joint debtors cannot be held liable under Section 138 unless they are directors of a company or partners of a firm as per Section 141 of the Act. As petitioners 2 and 3 were not the drawers of the dishonored cheques and were not part of a common account, proceedings against them would be an abuse of process of law. Consequently, the court quashed the proceedings against petitioners 2 and 3. Issue 3: Regarding the liability of the proprietor of a proprietary concern, the court emphasized that the liability of the concern and the proprietor is joint and several. Even though the concern was not made an accused, the proprietor acting on its behalf cannot seek relief under Section 482 of the Criminal Procedure Code. Therefore, the first petitioner, acting as the proprietor, was not entitled to relief, and the court dismissed their petition while partially allowing the petition by quashing proceedings against petitioners 2 and 3 in the case. In conclusion, the judgment clarified the liabilities of the petitioners under Section 138 of the Negotiable Instruments Act, addressing issues related to joint debtors, proprietary concerns, and the legal implications of dishonored cheques issued in pursuance of a compromise.
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