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The bench concurred with the applicant's argument and held that it is mandatory to include the company or the firm, as the case may be, as a party accused in the complaint
The Bombay High Court has recently ruled that proceedings under Section 141 of the Negotiable Instruments Act, 1881 can be initiated against an unregistered partnership firm, and it can be arraigned as an accused.
Section 141 of the Negotiable Instruments Act, of 1881, outlines the offences that may be committed by a company. The explanation provided in Section 141 of the act clarifies that a company includes a firm and an association of individuals. However, it does not make any distinction between registered and unregistered firms.
A single-judge bench of the Bombay High Court at Nagpur comprising Justice Anil Pansare was hearing a revision petition against the order of the Sessions Court that dismissed the plea of the petitioner.
In February 2013, the complainant lent Rs. 223,000 to the applicant for his business purposes. However, when the complainant attempted to withdraw the amount, he discovered that the account had been closed.
Subsequently, after completing the necessary formalities, the complainant filed a complaint against the applicant, leading to his conviction.
The applicant then appealed the trial court's decision before the sessions court, but the appeal was ultimately dismissed. The applicant then filed a revision plea before the high court.
The counsel representing the applicant before the high court contended that financial assistance was extended to the applicant as a partner and, therefore, the partnership firm should have been included as an accused under Section 141 of the Negotiable Instruments Act, 1881.
In response, the counsel representing the complainant argued that since the firm was unregistered, it could not have been named as a party accused in accordance with Section 69 of the Partnership Act, 1932.
The bench concurred with the applicant's argument and held that it is mandatory to include the company or the firm, as the case may be, as a party accused in the complaint.
“Thus, it is held that the registration or non registration of the partnership firm will have no bearing insofar as Section 141 of the Act of 1881 is concerned. The provision under Section 141 of the Act of 1881 makes it mandatory to arraign the company or the firm, as the case may be, as party accused in the complaint. This provision or any other provision of the Act of 1881 does not put embargo on making unregistered partnership firm an accused. That being the position and considering the preposition of law spelt out in the aforesaid case, I do not find any reason to take a different view in the matter,” the order reads.
The counsel representing the complainant then requested the high court to remand the case back to the trial court.
However, the high court, citing a judgment from the Apex Court, stated that a company not originally named as an accused in the complaint cannot be subsequently added.
The high court said that in the absence of a demand notice against the company, which meant that the preconditions under Section 138 of the Act of 1881 were not satisfied in relation to the company.
As a result, the bench proceeded to quash and set aside the orders of both the magistrate court and the sessions court.
Advocate P. P. Sudhakaran appeared for the applicant, Advocate G. C. Khond appeared for the complainant, and Additional Public Prosecutor H. S. Dhande appeared for the state.
Case title: Satheesan Kuttappan vs P. P. Sudhakaran & Ors
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