2002 (5) TMI 877 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the notice issued after the bouncing of cheques.
2. Bar of limitation for filing the complaint under Section 142 of the Negotiable Instruments Act.
3. Maintainability of the criminal proceeding by an unregistered firm under Section 69 of the Partnership Act.
4. Allegation of sub-standard goods supplied by the complainant.
5. Validity of the complaint due to an unsigned vakalatnama.

Detailed Analysis:

1. Validity of the Notice Issued After Bouncing of Cheques:
The accused argued that the notice issued after the cheques were dishonored was invalid. The court found that the complainant served notice on the accused on 6.5.1999, which was acknowledged on 10.5.1999. The accused was required to make the payment within 15 days from the date of receipt of the notice, but failed to do so. The court concluded that the notice was valid and in compliance with the provisions of the Negotiable Instruments Act.

2. Bar of Limitation for Filing the Complaint:
The accused contended that the complaint was barred by limitation as per Section 142 of the Negotiable Instruments Act. The court noted that the complaint was filed on 18.6.1999, which was within the period of limitation. The court held that the complaint was filed within the prescribed time, and thus, the limitation argument was rejected.

3. Maintainability of the Criminal Proceeding by an Unregistered Firm:
The accused argued that the complainant, M/s. Sterling Novelty Products, being an unregistered firm, could not maintain the criminal proceeding under Section 69 of the Partnership Act. The court examined the relevant provisions and judicial interpretations, concluding that Section 69(2) of the Partnership Act bars only civil suits to enforce a right arising from a contract by an unregistered firm. The court held that the bar does not extend to criminal proceedings under Section 138 of the Negotiable Instruments Act, as it is a penal provision. Thus, the criminal proceeding was maintainable irrespective of the firm's registration status.

4. Allegation of Sub-standard Goods Supplied by the Complainant:
The accused claimed that the goods supplied by the complainant were sub-standard, which compelled him to stop payment on the cheques. The court noted that this defense was raised only after the cheques were dishonored and found it to be an afterthought. The court emphasized that such a plea could not be entertained to quash the complaint, as the dispute regarding the quality of goods was a separate issue from the criminal liability under Section 138 of the Negotiable Instruments Act.

5. Validity of the Complaint Due to an Unsigned Vakalatnama:
The accused argued that the complaint was not properly constituted as the vakalatnama filed in the court was unsigned. The complainant countered that the vakalatnama was indeed executed by the father of the minor partner. The court observed that even if the vakalatnama was unsigned, it would not be a sufficient ground to dismiss the complaint at the threshold. The court found no merit in this argument and upheld the validity of the complaint.

Conclusion:
The court dismissed the criminal miscellaneous application, holding that the criminal proceeding under Section 138 of the Negotiable Instruments Act was maintainable despite the firm's registration status. The court directed the lower court to expedite the hearing and dispose of the case within a reasonable time, preferably within six months from the date of receipt of the judgment.