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2022 (6) TMI 535 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - acquittal of the accused - existence of debt and liability or not - service of demand notice - cross-examination of witnesses - HELD THAT - The opposite party did not raise a probable defence that there was no existing liability. However the appellant in its affidavit of evidence showed the transactions made in favour of the opposite party. The appellant provided an amount of Rs.75,00,000/- to the opposite party on the request of Sidharth Rai who is one of the partner of the appellant and also husband of the opposite party to run a business of tea purchase. Assurance was given to repay the amount in installment by 2016 and in the mean time would pay the profit from tea trading. The opposite party refunded an amount of Rs.13,00,000/- in 2013 and Rs.5,00,000/- in 2015. A total of Rs.18,00,000/- out of Rs.75,00,000/- has been paid and Rs.3,53,480/- as commission from profit has been paid. In cross examination not a single question was put to the opposite party to rebut the liability. In examination under Section 313 Cr.P.C the opposite party stated that I have not issued any cheque. I do not know how they have got the cheque. May be with fraudulence and I don t have any liabilities to them. The opposite party did not challenge the issuance of such fraudulent cheque. No defence has been taken nor any documents placed challenging the impugned cheque. The proviso to Section 138 of the Act affords clear indication that giving notice in the context is not the same as receipt of notice. Giving is the process of which receipt is the accomplishment. The payee has to perform the former process by sending the notice to the drawer at his correct address - this Court has no hesitation to hold that in connection with complaint case, demand notice was duly served upon the accused. The order of acquittal passed in favour of the accused/respondent is liable to be set aside - appeal allowed.
Issues Involved:
1. Maintainability of the complaint by an unregistered partnership firm. 2. Authority of one partner to file a complaint under Section 138 of the NI Act without the consent of other partners. 3. Existence of legally enforceable debt or liability. 4. Proper issuance and service of demand notice. 5. Examination of the accused under Section 313 Cr.P.C. Issue-wise Detailed Analysis: 1. Maintainability of the Complaint by an Unregistered Partnership Firm: The appellant argued that a complaint under Section 138 of the NI Act is maintainable even if the firm is unregistered, citing various judgments including *Smt. Rani Kapoor vs. M/s Silvermount* and *B.S.I Ltd vs. Gift Holding Pvt. Ltd*. It was contended that Section 69 of the Partnership Act does not apply to criminal complaints under Section 138 of the NI Act, as these are penal provisions intended to bring the offender to penal liability, not for the recovery of money. The court upheld this view, affirming that an unregistered firm can maintain a complaint under Section 138. 2. Authority of One Partner to File a Complaint: The appellant's counsel cited *Ganesh Sukhlal Joshi vs. M.A Bharti* and other cases to argue that a complaint by one partner is valid and does not require the consent of other partners. The trial court initially failed to address whether one partner could file a complaint without the other's consent. However, the appellate court clarified that under Section 18 of the Partnership Act, a partner is an agent of the firm and competent to file a complaint on behalf of the firm. Hence, consent from other partners is not required. 3. Existence of Legally Enforceable Debt or Liability: The appellant argued that the cheques were issued in discharge of existing liabilities, invoking the presumption under Sections 118 and 139 of the NI Act. The trial court had acquitted the respondent, stating the complainant failed to prove the liability. However, the appellate court noted that the respondent did not provide any substantial defense to rebut the presumption of liability. The evidence showed that the complainant firm had provided Rs.75,00,000/- to the respondent, of which Rs.18,00,000/- had been repaid. The court held that the respondent had an existing debt or liability and failed to rebut the presumption under Section 139. 4. Proper Issuance and Service of Demand Notice: The appellant contended that the demand notices were sent to the correct addresses and should be deemed served under Section 27 of the General Clauses Act. The court noted that the notices were returned with the endorsement "Not Known," but the same addresses were used for summons, which were received. The court held that the notices were properly issued and deemed served, citing *K. Bhaskaran vs Sankaran Vaidhyan Balan* and other cases supporting deemed service when notices are correctly addressed and sent by registered post. 5. Examination of the Accused under Section 313 Cr.P.C: The respondent argued that improper examination under Section 313 Cr.P.C prejudiced her defense. The court dismissed this argument, stating that the purpose of Section 313 is to ascertain the defense plea on incriminating circumstances. The court found that the respondent understood the questions and gave proper replies, thus the trial was not vitiated. Conclusion: The appellate court found that the trial court erred in acquitting the respondent. It held that the complaints were maintainable, the cheques were issued in discharge of existing liabilities, and the demand notices were properly served. The judgments of acquittal were set aside, and the cases were remanded to the trial court for recording conviction and sentence against the respondent. The respondent was directed to appear before the trial court within two weeks.
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