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TMI Blog2021 (1) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Whether the cheque was issued by a proprietorship firm or by respondent, and whether the complaint filed against the respondent is maintainable or not? - HELD THAT:- It is the case of the appellant, that the advertisement of the shop was got done through the appellant, therefore, a cheque of ₹ 3 lac was given. It is clear from disputed cheque Ex. P.1, that the cheque was issued by the respondent in the capacity of proprietor of Prapti Collection - Undisputedly, the cheque was issued by the proprietorship firm, however, neither the statutory notice was sent to the proprietorship firm nor has been arraigned as an accused. Whether the complaint filed by the appellant against the respondent alone was maintainable, because undisputedly, neither any statutory notice was issued to the proprietorship firm nor the said firm has been arraigned as an accused? - HELD THAT:- A proprietorship firm is neither a Company, nor a partnership firm. It is merely a business name. Although even a partnership firm is not a juristic person, but in view of Order 30 Rule 1 CPC, the partners can sue or be sued in the name of firm. A suit by a proprietorship firm is only by its proprietor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble debt, which stood bounced due to in-sufficient funds. Accordingly, the judgment dated 13/10/2017 passed by Additional Chief Judicial Magistrate, Gwalior in Criminal Case No.14094/2010 is hereby set aside and the respondent is hereby convicted under Section 138 of Negotiable Instruments Act. Question of sentence - HELD THAT:- As per Section 138 of Negotiable Instruments Act, the imprisonment for a term which may extend to 2 years and fine which may extend twice the amount of the cheque can be imposed. However, as this Court is not intending to impose jail sentence of more than 1 year, therefore, in the light of Section 143 of Negotiable Instruments Act, it is not necessary to hear the respondent on the question of sentence. Considering the totality of the facts and circumstances of the case, the respondent is awarded jail sentence of rigorous imprisonment of 1 year and is also directed to pay compensation of ₹ 5 lacs which shall be payable to the appellant - tcompensation amount be deposited within a period of one month from today, failing which the respondent shall undergo the jail sentence of 3 months - respondent is directed to surrender before the Trial Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advertisement of his shop done by the appellant and in lieu of that advertisement, he had given the cheque of ₹ 3 lacs to the appellant and by mistake, incorrect averments were made in the complaint. However, the said application was rejected. During the course of trial, the appellant also sought liberty to lead secondary evidence by filing the photo copy of the bills. The said application was allowed by order dated 28/02/2017 and the photo copies of the bills were permitted to be exhibited. However, it was also observed that the permission to lead the secondary evidence shall be subject to adjudication of admissibility and genuineness of the bills at the time of final hearing. After recording the evidence of the appellant and his witnesses, the statement of respondent under Section 313 of CrPC was recorded. The respondent thereafter, examined himself and one Ajay Jadon in his defence. The Trial Court by the impugned judgment dismissed the complaint and the respondent was acquitted. Challenging the judgment passed by the Court below, it is submitted by the Counsel for the appellant that the Court below has failed to see that in the notice, Ex.P3, the appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the respondent that his account had ''Sufficient Funds''. It is further submitted that since the respondent has not denied his signature on the disputed cheque Ex.P1, therefore, his evidence that he had kept the cheques in his drawer, and the same were stolen, cannot be accepted. It is the case of the respondent himself that he did not try to lodge any report about theft of his cheques prior to filing of the complaint and even otherwise, there is nothing on record to show that any police complaint was ever lodged with regard to theft of cheques. Further, the respondent has admitted that the photographs showing the advertisement of the shop of the respondent are correct. Under these circumstances, it is submitted that the Court below has committed a glaring mistake in dismissing the complaint. Per contra, the counsel for the complainant has supported the reasons assigned by the Trial Court. Heard the learned counsel for the parties. The appellant, in support of his case, has examined himself as PW1 (Deepak Jethwani), Pankaj Ingele (PW2) and Sanjay Singh (PW3), whereas the respondent has examined himself (Naresh Jethwani) as (DW1) and Ajay Jadon (DW2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship firm, however, neither the statutory notice was sent to the proprietorship firm nor has been arraigned as an accused. Now the next question for consideration is that whether the complaint filed by the appellant against the respondent alone was maintainable, because undisputedly, neither any statutory notice was issued to the proprietorship firm nor the said firm has been arraigned as an accused. The Supreme Court in the case of Raghu Lakshminarayanan v. Fine Tubes reported in (2007) 5 SCC 103 has held as under : 9. The description of the accused in the complaint petition is absolutely vague. A juristic person can be a company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Partnership Act, 1932 or an association of persons which ordinarily would mean a body of persons which is not incorporated under any statute. A proprietary concern, however, stands absolutely on a different footing. A person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs. A proprietary concern is not a company. Company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prietary concern which can be so made applicable keeping in view the nature of the case. A proprietorship firm is neither a Company, nor a partnership firm. It is merely a business name. Although even a partnership firm is not a juristic person, but in view of Order 30 Rule 1 CPC, the partners can sue or be sued in the name of firm. A suit by a proprietorship firm is only by its proprietor. Therefore, Section 141 of Negotiable Instruments Act, would not apply. Thus, the respondent alone can be prosecuted being the proprietor of the proprietorship firm. Accordingly, it is held, that the Trial Court, committed mistake by holding that since, the proprietorship firm was not arraigned as an accused, therefore, the complaint is not maintainable. The next question for consideration is that whether the complaint filed by the proprietorship firm is maintainable or not? The disputed cheque, Ex. P.1 was issued in favor of the appellant. Thus, the complainant is the payee. Section 142 of Negotiable Instruments Act reads as under : 142. Cognizance of offences.-( 1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) no court sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of someone else). The payee, as noticed above, is M/s Shankar Finance Investments. Once the complaint is in the name of the payee and is in writing, the requirements of Section 142 are fulfilled. Who should represent the payee where the payee is a company, or how the payee should be represented where payee is a sole proprietary concern, is not a matter that is governed by Section 142, but by the general law. 10. As contrasted from a company incorporated under the Companies Act, 1956 which is a legal entity distinct from its shareholders, a proprietary concern is not a legal entity distinct from its proprietor. A proprietary concern is nothing but an individual trading under a trade name. In civil law where an individual carries on business in a name or style other than his own name, he cannot sue in the trading name but must sue in his own name, though others can sue him in the trading name. Therefore, if the appellant in this case had to file a civil suit, the proper description of the plaintiff should be Atmakuri Sankara Rao carrying on business under the name and style of M/s Shankar Finance Investments, a sole proprietary concern . But we are not dealing with a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e went to ICICI Bank and obtained the bank statement Ex.D1. In para 3 of his cross-examination, he admitted that in advertisement photographs Ex.P.8 and P.9, the photograph of his shop and number of respondent is mentioned. He further stated that after looking at the photographs, he came to know about the advertisement but even thereafter, he did not lodge any complaint to anybody. However, he tried to explain that as the complaint is already pending, therefore, he did not think it proper to make a complaint to any officer as the Court is the Supreme. He further stated that he never made a complaint to the police or any institution with regard to bills Ex.P10 and Ex.P11. In paragraph 4 of his cross-examination, he could not clarify that on which date he realized that the cheques were missing from his drawer. He further admitted that even after receipt of statutory notice, he did not lodge any complaint with the Bank. However, he gave an explanation that since his cheque was not dishonored, therefore, he did not lodge the complaint. He further stated that the return memo does not bear the seal of the Bank and blank memos are easily available and he can also produce the same. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 139 that the cheque has been issued in discharge of a debt or liability is on the accused and the fact that the cheque might be post-dated does not absolve the drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act. 33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. 35. It is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. 15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (1) may presume (rebuttable), (2) shall presume (rebuttable), and (3) conclusive presumptions (irrebuttable). The term presumption is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the presumed fact drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means taking as true without examination or proof . * * * 18. Applying the definition of the word proved in Section 3 of the Evidence Act to the provisions of Sections 118 and 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. (emphasis supplied) It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs the seal of the bank, it cannot be read in evidence. In the present case, the appellant has proved beyond reasonable doubt that the return memo, Ex. P.2 was duly issued by ICICI Bank. Thus, this Court is of the considered opinion, that the appellant has successfully established that the disputed cheque, Ex. P.1 was issued by the respondent in discharge of his legally enforceable debt, which stood bounced due to in-sufficient funds. Accordingly, the judgment dated 13/10/2017 passed by Additional Chief Judicial Magistrate, Gwalior in Criminal Case No.14094/2010 is hereby set aside and the respondent is hereby convicted under Section 138 of Negotiable Instruments Act. So far as the question of sentence is concerned, as per Section 138 of Negotiable Instruments Act, the imprisonment for a term which may extend to 2 years and fine which may extend twice the amount of the cheque can be imposed. However, as this Court is not intending to impose jail sentence of more than 1 year, therefore, in the light of Section 143 of Negotiable Instruments Act, it is not necessary to hear the respondent on the question of sentence. Considering the totality of the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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