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Issues Involved:
1. Legality of the Magistrate taking cognizance after recording the sworn statement. 2. Prosecution of individual partners without the firm being impleaded as an accused. 3. Validity of the notice period given under Section 138 of the Negotiable Instruments Act. Issue-wise Detailed Analysis: 1. Legality of the Magistrate taking cognizance after recording the sworn statement: The petitioner argued that the Magistrate took cognizance of the offence after recording the sworn statement, which is illegal and vitiates the proceedings. It was contended that cognizance should precede the recording of the sworn statement as per the decision in State v. Papireddy. However, the court noted that it is well-settled that when a Magistrate, after receiving the complaint, applies his mind to take further steps under Chapter XV, he must be deemed to have taken cognizance of the offence. The court observed that the Magistrate had directed the complaint to be registered and examined the complainant on subsequent dates, indicating that he had already taken cognizance of the offence. The mere fact that the Magistrate again stated that cognizance was taken while issuing the process does not vitiate the proceedings, as it was only a superfluous statement. 2. Prosecution of individual partners without the firm being impleaded as an accused: The petitioner contended that the cheque was issued by the partnership firm, and as the firm itself was not made an accused, the prosecution of the accused persons in their individual capacity could not be sustained. The court referred to Section 141 of the Negotiable Instruments Act, which provides that if the person committing an offence under Section 138 is a company, every person in charge of and responsible to the company for the conduct of the business, as well as the company, shall be deemed guilty of the offence. The Explanation to Section 141 includes a firm within the definition of a company. The court noted that the cheque was issued by the firm, and the complaint and documents indicated that the accused persons were being prosecuted as partners of the firm. The court referred to the Supreme Court's decision in Sheoratan Agarwal v. State of Madhya Pradesh, which held that there is no statutory compulsion that the person-in-charge or an officer of the company may not be prosecuted unless the company itself is prosecuted. The court concluded that the contention that the petitioner could not be prosecuted without the firm being arraigned as an accused could not be accepted. 3. Validity of the notice period given under Section 138 of the Negotiable Instruments Act: The petitioner argued that the notice issued by the complainant gave only seven days for payment, which is in contravention of the proviso to Section 138 of the Act, and thus, no offence under Section 138 could be said to have been committed. The court referred to the proviso to Section 138, which requires that the payee or holder in due course makes a demand for payment by giving a notice in writing within fifteen days of receiving information from the bank regarding the return of the cheque as unpaid. The drawer of the cheque has fifteen days from the receipt of the notice to make the payment. The court clarified that the statute does not stipulate that the notice should give any specific time for payment. Even if the notice specifies a time lesser than fifteen days, the statute gives the drawer fifteen days from the receipt of the notice to make the payment. The court disagreed with the view that a notice giving less than fifteen days for payment is invalid. The fact that the notice in the present case gave seven days for payment does not render it invalid, as the drawer still has fifteen days from the receipt of the notice to make the payment. Conclusion: After considering all the issues raised, the court found no good ground to quash the proceedings and rejected the petition. However, it clarified that any observations made on the factual aspects of the case should not be considered by the trial court during the appreciation of evidence after the trial concludes.
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