- (1.) In this criminal revisional application under Section 482 of the Code of Criminal Procedure the petitioner, a partnership firm has challenged the legality and validity of its prosecution under Section 138 of the Negotiable INstruments Act and sought for quashing of the same.
(2.) Heard the learned advocates appearing on behalf of the parties. Perused the grounds relied upon in support of the prayer for quashing and the pleadings in the application. Considered their respective submissions and case laws cited by them. The grounds on which the aforesaid criminal prosecution has been challenged are as follows; (a) After dishonour of the cheque no demand notice was issued against the partners of the firm and without they being prosecuted, the impugned prosecution has been launched against the firm alone. (b) The transaction of Negotiable Instruments is nothing but a contract and no contract can be entered into with a party who has no legal entity. (c) No notice was issued against the drawer/signatory of the cheque. On the other hand, the learned advocate of the complainant/opposite party vehemently opposed the prayer for quashing. This is a case where the impugned prosecution under Section 138 of the Negotiable Instruments Act has been launched against a partnership firm under Section 138 of the Negotiable Instruments Act following dishonour of a cheque for Rs. 25,977/- and when in spite of receipt of demand notice by the accused firm no payment has been made.
(3.) In this criminal revision only point that fell for consideration is to whether a partnership firm can be proceeded against for alleged commission of an offence punishable under Section 138 of the Negotiable INstruments Act, simplicitor, without its partner being prosecuted for their vicarious liability. It is the case of the complainant that the cheque was issued for and on behalf of the present petitioner, a partnership firm in discharge of its liability accrued against an accommodation loan which it took from the complainant's bank. The said cheque was drawn on an account maintained by the accused firm with its banker. Thereafter, when the cheque was dishonoured demand notice was issued to the said partnership firm and despite receipt of such notice no payment has been made.;