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TMI Blog2019 (7) TMI 1930X X X X Extracts X X X X X X X X Extracts X X X X ..... tus of a legal entity. It is trite law that when the provisions of criminal law are interpreted, the concept of strict construction will apply. Therefore, this Court cannot read the provisions of Section 69(2) of Indian Partnership Act into the provisions of Section 141 of the Negotiable Instruments Act. Section 142 of the Act under caption Cognizance of offences provides that cognizance of the offence under Section 138 can be taken upon a 'complaint' in writing made by the payee or the holder in due course of the cheque. The word 'complaint' defined in Section 2(d) of the Code of Criminal Procedure means any allegation made orally or in writing to a Magistrate, with a view to taking action under the said Code, that some person, whether known or unknown, has committed an offence, but does not include a police report. Since Section 138 is a penal provision, that prescribes punishment for bouncing of cheque on any of the grounds mentioned therein, the Legislature in its wisdom has used word 'complaint' and not 'suit' in Section 142 because a 'suit' can be maintained for recovery of money or for any other civil remedies. Section 141 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque for a sum of Rs.3,00,000/- (Rupees three lakhs only). The said cheque was dishonored on the ground of in-sufficiency of funds and after the issuance of the statutory notice, the respondent proceeded to file a complaint against the petitioners. 4. The petitioners who are shown as accused persons in this complaint, have filed this petition to quash the proceedings primarily on the ground that the cheque in question was drawn in favour of the respondent only on behalf of the partnership firm. Therefore, the complaint cannot be maintained without issuing the statutory notice to the partnership firm and making the partnership firm as an accused in the complaint. 5. The learned counsel for the petitioners submitted that the provisions of Section 141 of the Negotiable Instruments Act, which deals with offences by Companies, will equally apply to the partnership firm also by virtue of the explanation given under the said provision. The learned counsel further submitted that the Hon'ble Supreme Court has now settled the law to the effect that the complaint under Section 138 of the Negotiable Instruments Act, cannot be maintained against the directors of the Company, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same law has been made applicable even to the partnership firm in N.Elangovan .Vs. C.Ganesan reported in 2014(4)MLJ (Crl) 517. 11. The issue involved in this case is that the partnership firm is an unregistered firm and therefore according to the learned counsel for the respondent, the firm need not be made as an accused and the complaint can be filed straight away against the partners. 12. Section 69(2) of the Indian Partnership Act, 1932 deals with the effect of non registration. Section 69(2) Act, specifically provides for a bar in maintaining a suit where (i) Suit is by an unregistered firm (ii) Suit is to enforce a right arising from a contract (iii) Suit is filed against a third party and (iv) persons suing are not shown in register of firms as partners in firm. It is to be borne in mind that the bar contemplated under Section 69(2) of the Indian Partnership Act will come into play only when the Suit is filed to enforce a right arising from a contract against a third party. 13. This Court had an occasion to deal with a case where this bar Section 69(2) of the Indian Partnership Act, was sought to be invoked while enforcing a common law right. This Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of the business dealing with the plaintiffs firm with such third party defendant. The Hon'ble Supreme Court has decided in Haldiram Bhujjawala v. Anand Kumar Deepak Kumar, AIR 2000 SC 1287 that the real crux of the question is that the legislature, when it used the words arising out of a contract in Section 69(2), it is referring to a contract entered into in course of business transaction by the unregistered plaintiff firm with its customers/defendants and the idea is to protect those in commerce, who deal with such a partnership firm in business. Such said third parties, who deal with the partners ought to be enabled to know what the names of the partners of the firm before they deal with them in business . It is evident that Section 69(2) is not attracted to any and every contract. 14. Admittedly, in this case, the Suit is not for enforcement of any right arising out of a contract entered into by or on behalf of the plaintiffs firm with the defendant in the course of business transaction. Moreover, Section 69(2) does not bar a Suit to enforce common law right even if the firm is unregistered on the date of the Suit. Hence, the Suit is not barred by Section 69(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine itself only to enforcement of a right arising from a contract. This cannot even be extended for enforcing a common law right. In the present case, this Court is dealing with a provision under the criminal law wherein, the learned counsel for the respondent is seeking to justify the fact that insofar as an unregistered firm is concerned, it is not necessary to make the firm as an accused since it does not qualify the status of a legal entity. It is trite law that when the provisions of criminal law are interpreted, the concept of strict construction will apply. Therefore, this Court cannot read the provisions of Section 69(2) of Indian Partnership Act into the provisions of Section 141 of the Negotiable Instruments Act. 15. It will be relevant to rely upon the judgments cited by the learned counsel for the petitioners. 16. The first judgment that was relied upon by the learned counsel for the petitioners is the case of Abdul Gafoor Vs Abdurahiman reported in 1999(4) Crimes 98, referred supra. The relevant portions in the judgment is extracted hereunder. 3.The counsel for the revision petitioner submitted that the 1st respondent being an unregistered partnership firm, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a contract cannot be enforced by way of suit if the firm is unregistered. The word 'suit' has not been defined in the aforesaid Act. It is, therefore, desirable to refer to 'Law of Lexicon' and the judicial pronouncements to ascertain the true meaning of word 'suit' in the legal context. 'Suit' means 'a proceeding Instituted in civil court by presentation of a plaint. The word 'suit' ought to be confined to such proceedings as, under that description, are directly dealt with in the Code of Civil Procedure, or such as by the operation of the particular Act which regulates them are treated as suits (See Law of Lexicon, 1997 Edition). The word 'suit' in common parlance means a process Instituted in a Court for recovery or protection of a right, enforcement of a claim, or to redress civil injuries. 9. Section 142 of the Act under caption Cognizance of offences provides that cognizance of the offence under Section 138 can be taken upon a 'complaint' in writing made by the payee or the holder in due course of the cheque. The word 'complaint' defined in Section 2(d) of the Code of Criminal Procedure means any alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 138 is not a suit by the indorsee to enforce a right arising out of a contract and, therefore, the bar under Section 69(2) of the Partnership Act will not operate in such a case. To the same effect is view of a learned single Judge of the said High Court in the case of Abdul Gafoor v. Abdurahiman, 1999 ISJ (Banking) 701. It is observed in the said case the effect of non-registration of the partnership firm under Section 69 of the Partnership Act is applicable only to cases involving civil rights and it has no application to criminal cases. 10. In a recent judgment rendered by the Supreme Court in B.S.I. Ltd. and another v. Gift Holdings Put. Ltd. and another. 2000 (1) ACrR 683 (SC) : 2000 SCC (Cri) 538, the word 'suit' came to be interpreted for deciding maintainability of a proceeding under Section 138 of the Act in view of the ban imposed by the Sick Industrial Companies (Special Provisions) Act. Under Section 22(1) of the aforesaid Act. it is provided that no suit for recovery of money or enforcement of any security against the industrial company or guarantee in respect of any loan or advance granted to the industrial company shall lie if in respect of an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be. While interpreting the provision, the Hon'ble Supreme Court has categorically held that the complaint cannot be maintained against the directors of the Company, without making the company as an accused person. This concept has been extended even for Partnership Firms. The registration or non-registration of the Partnership Firm will have no bearing insofar as 141 of the Negotiable Instruments Act is concerned. 20. In view of the above discussion, this Court is not in agreement with the submissions made by the learned counsel for the respondent. In this case admittedly, the cheque was given in the name of the Partnership Firm and after the cheque was dishonored, no statutory notice was issued to the Partnership Firm, and the Partnership Firm was not made as an accused in the complaint. Only the partners have been shown as accused persons in this complaint. Such a complaint is unsustainable and not in accordance with Section 141 of the Negotiable Instruments Act and the law laid down by the Hon'ble Supreme Court. Therefore, the proceedings will have to be necessarily interfered with by this Court in exercise of its jurisdiction under Section 482 of Cr.P.C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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