2024 (7) TMI 1212 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - vicarious liability under Section 141 NI Act - HELD THAT - Apart from the bald averment made in the complaint as well as during the course of submissions that the petitioner is the deemed owner of the firm, no other evidence has been produced/placed on record to show that the petitioner is the deemed/real owner or that he was in charge or responsible for the business of the firm at the time of the commission of the offence. On the other hand, the petitioner has placed on record a certificate of acknowledgement of registration from the Deputy Registrar of Firms. The said document nowhere shows the present petitioner as a partner in the said firm. Further, a perusal of the complaint would show that the cheque was issued on account of the firm and was signed by Sh. Hoshiyar Singh and not the present petitioner. There is no evidence on record to show that the petitioner was a partner of the firm or that he was the signatory of the cheque. In the absence of any such evidence to bring the petitioner within the fold of Section 138 r/w Section 141 NI Act, forcing the petitioner to stand trial solely on the basis of a bald averment, that too unsubstantiated, would amount to an abuse of the process of law. Considering the entire factual matrix including the fact that the petitioner has presented an unimpeachable and incontrovertible material in the form of certificate of acknowledgement issued by the Deputy Registrar of Firms, which clearly shows that he is not a partner in the accused firm as well as the fact that the respondent has failed to produce any evidence to the contrary, the present petition is allowed.

Summary

Issues:
Challenge to summoning order under Section 482 Cr.P.C. in a case under Section 138 of the Negotiable Instruments Act.
1. Issue 1 - Petitioner's Liability:
The petitioner contested the summoning order, arguing that he was neither a partner nor an authorized signatory of the accused firm. The respondent claimed the petitioner was a deemed owner, making him liable under Section 138 NI Act.
2. Issue 2 - Interpretation of Section 141 NI Act:
The respondent relied on Section 141 NI Act to hold the petitioner liable as a deemed owner, forming an association of persons with accused No.2. The legal interpretation of this section was crucial in determining the petitioner's liability.
3. Issue 3 - Evidence and Burden of Proof:
The court examined the evidence presented by both parties. The petitioner provided a certificate of acknowledgement from the Deputy Registrar of Firms, showing he was not a partner in the firm. The respondent failed to produce substantial evidence to establish the petitioner's deemed ownership.
4. Issue 4 - Abuse of Process of Law:
The court assessed whether forcing the petitioner to stand trial solely based on a bald averment, without concrete evidence, would amount to an abuse of the legal process.

Analysis:
The complaint alleged that the accused firm issued a dishonored cheque, leading to a legal notice and subsequent filing of the complaint. The respondent argued that the petitioner, though not a partner, was a deemed owner and should be held liable under Section 138 NI Act. However, the court found no substantial evidence supporting the petitioner's deemed ownership. The petitioner's certificate of acknowledgement from the Registrar of Firms and the lack of proof from the respondent led to the quashing of the summoning order and the complaint against the petitioner. The court emphasized the need for unimpeachable evidence to establish liability, citing the principles outlined by the Supreme Court in a relevant case. The judgment highlighted that a mere bald averment without concrete proof is insufficient to subject an individual to trial, emphasizing the importance of substantiating contentions to avoid abuse of the legal process.