High Court

1. Heard Sri Saurabh Kumar Pandey, learned counsel for the applicant as well as Sri Vikas Sharma, learned State Law Officer for the State/opposite party no.1.

2. This application under Section 528 of the BNSS has been filed by the applicant to quash the entire criminal proceedings of Complaint Case No.459 of 2024 (Old No.14810 of 2024), (M/s. Shasti Enterprises Pvt. Vs. Ankit Singh), under Section 138 of the N.I. Act, Police Station Kotwali, District Bareilly, pending in the court of Additional Court (N.I. Act), Bareilly and summoning order dated 5.3.2025 passed by Additional Court (N.I. Act), Bareilly.

3. Learned counsel for the applicant has submitted that a complaint stood lodged by the opposite party no.2 against the applicant, who is a proprietor of Jheel Plyhouse that with respect to certain business transaction, a cheque of an amount of Rs.6,40,235 is stated to have been drawn by the applicant in favour of the opposite party No.2 bearing No. 000214 dated 26.07.2024 which was dishonoured on 31.07.2024 with the remark 'funds insufficient', a statutory notice was issued on 6.08.2024 and thereafter, the complaint was lodged. Thereafter on 5.3.2025, the applicant has been summoned.

4. Learned counsel for the applicant has submitted that the summoning order cannot be sustained for more than one reason. Further submission is that the complaint was not maintainable at all particularly when the Jheel Plyhouse was not made a party neither in the complaint nor it was summoned.Next submission is that in view of the judgment in the case of Aneeta Hada Vs. Godfather Travels & Tours (P) Ltd. (2012) 5 SCC 661, the company namely Jheel Plyhouse was a necessary proper party and in absence of arraigning of the said company as an accused, the complaint is not bound to succeed. It is further contended that even otherwise the Magistrate prior before summoning the applicant has not recorded these statements under Sections 200 and 202 of the Cr.P.C. and there has been a clear violation of these statutory provisions which was mandatory required to be complied with before summoning the applicants. It is also contended that Dipanshu Agarwal had without disclosing his designation and the capacity had filed an affidavit in the form of his statement, thus, the summoning order cannot be sustained. It is further contended that the summoning order is cryptic and the same be set aside.

5. Learned AGA on the hand submits that there is no requirement of recording of statements under Sections 200 and 202 of the Cr.P.C. in the matters pertaining to N.I. Act and further non- arraigning, of the firm would not be material and of relevance.

6. I have heard the submissions so made across the bar and perused the material on record. Apparently, with respect to the dishonour of a cheque, a statutory demand notice was issued and a complaint came to be filed. The first and the foremost argument raised by the learned counsel for the applicant that in absence of arraigning the firm Jheel Plyhouse as an accused, the complaint would fall, cannot be accepted for the simple reason that a perusal of the complaint would show that it is a sole proprietorship firm and Ankit Singh is the sole proprietor. There is a distinction between a company, partnership and a sole proprietor as a company comprises of directors whereas the partnership firm comprises of more than one partner. However in the sole proprietorship, there is only one person, who is the sole proprietor.

7. This court in the case of Abhishek Jain vs. State of U.P. & others, (2023) 0 Supreme (Alld.) 1581 in para 16 has observed as under:- "16. From the aforesaid observations made by the Apex Court, it is crystal clear that if the cheque is issued in the name of a firm, whether proprietorship or partnership firm, the proprietor or the partner as the case may be, becomes the holder in due course and he can sue in his own name and it is not necessary for him to sue in a trading name, though others can sue such firm in the trading name. Therefore, the instant complaint filed by the opposite party no.2, claiming himself to be a proprietor of the said firm in whose name the said cheque is issued by the applicant herein, in the considered opinion of this Court, complaint is maintainable. Even if the contention of applicant be accepted that the said Raj Rajeshwari Enterprises is a partnership and not a proprietorship firm, it will not help the applicant herein as even the partnership firm does not have a different legal identity and is not a juristic person. Therefore, a partner of the firm also becomes the holder in due course of the cheque within the meaning of Section 142 (1) of the N.I. Act. Thus, the complaint even on behalf of the partner of a firm in his own name is maintainable. Otherwise, also in the instant case, the applicant does not dispute that the cheque was issued in the name of the said Raj Rajeshwari Enterprises and the said cheque was dishonoured and demand notice was issued by the opposite party no.2, he has failed to comply with the said notice. Therefore, in view of the presumption under Section 139 of the N.I. Act and as per the law laid down by the Apex Court, this Court does not find any good ground to interfere in the instant case in exercise of jurisdiction under Section 482 Cr.P.C. "

8. Thus the rigours of Section 141 of the N.I. Act would not play in so far as sole proprietorship is concerned.

9. In so far as the other arguments raised by the learned counsel for the applicant that under Sections 200 & 202 of the Cr.P.C. statements were mandatory required required it before summoning the applicant, the same is also not convincible as the Hon'ble Apex Court in a, Constitution Bench of Hon'ble Supreme Court In Re.: Expeditious Trial of Cases Under Section 138 N.I. Act 1881 reported in AIR 2021 Supreme Court 1957 in paragraph- 12 observed as under:- "12. Another point that has been brought to our notice relates to the interpretation of Section 202 (2) which stipulates that the Magistrate shall take evidence of the witness on oath in an inquiry conducted under Section 202 (1) for the purpose of issuance of process. Section 145 of the Act provides that the evidence of the complainant may be given by him on affidavit, which shall be read in evidence in any inquiry, trial or other proceeding, notwithstanding anything contained in the Code. Section 145 (2) of the Act enables the court to summon and examine any person giving evidence on affidavit as to the facts contained therein, on an application of the prosecution or the accused. It is contended by the learned Amici Curiae that though there is no specific provision permitting the examination of witnesses on affidavit, Section 145 permits the complainant to be examined by way of an affidavit for the purpose of inquiry under Section 202. He suggested that Section 202 (2) should be read along with Section 145 and in respect of complaints under Section 138, the examination of witnesses also should be permitted on affidavit. Only in exceptional cases, the Magistrate may examine the witnesses personally. Section 145 of the Act is an exception to Section 202 in respect of examination of the complainant by way of an affidavit. There is no specific provision in relation to examination of the witnesses also on affidavit in Section 145. It becomes clear that Section 145 had been inserted in the Act, with effect from the year 2003, with the laudable object of speeding up trials in complaints filed under Section 138. If the evidence of the complainant may be given by him on affidavit, there is no reason for insisting on the evidence of the witnesses to be taken on oath. On a holistic reading of Section 145 along with Section 202, we hold that Section 202 (2) of the Code is inapplicable to complaints under Section 138 in respect of examination of witnesses on oath. The evidence of witnesses on behalf of the complainant shall be permitted on affidavit. If the Magistrate holds an inquiry himself, it is not compulsory that he should examine witnesses. In suitable cases, the Magistrate can examine documents for satisfaction as to the sufficiency of grounds for proceeding under Section 202."

10. A coordinate Bench of this Court Application U/S 482 No.14051 of 2008, Virendra Kumar Sharma vs. State of U.P. and another decided on 8.12.2021 has observed as under:- "Thus, it is clear from the above judgement of Hon'ble Supreme Court that even on the basis of affidavit filed on behalf of the complainant, an accused can be summoned under Section 138 Negotiable Instruments Act and there is no need to record statements under Sections 200 and 202 Cr.P.C."

11. As regards the submission of the learned counsel for the applicant that in the affidavit in the form of statement one Depanshu Agarwal has not disclosed his designation and capacity is concerned, the same would not be the ground to throttle the investigation at this stage. The defect, if any, is curable or not is the subject matter of trial and it might be a ground for consideration at this stage, when the decision is to be taken as to whether it is the case for conviction or acquittal. Even otherwise once a cheque stood drawn then the presumption under Section 139 of the N.I. Act is always in favour of the holder.

12. Accordingly, no ground is made out. The application stands rejected. Order Date :- 6.5.2025 piyush

1. Heard Sri Saurabh Kumar Pandey, learned counsel for the applicant as well as Sri Vikas Sharma, learned State Law Officer for the State/opposite party no.1.

2. This application under Section 528 of the BNSS has been filed by the applicant to quash the entire criminal proceedings of Complaint Case No.459 of 2024 (Old No.14810 of 2024), (M/s. Shasti Enterprises Pvt. Vs. Ankit Singh), under Section 138 of the N.I. Act, Police Station Kotwali, District Bareilly, pending in the court of Additional Court (N.I. Act), Bareilly and summoning order dated 5.3.2025 passed by Additional Court (N.I. Act), Bareilly.

3. Learned counsel for the applicant has submitted that a complaint stood lodged by the opposite party no.2 against the applicant, who is a proprietor of Jheel Plyhouse that with respect to certain business transaction, a cheque of an amount of Rs.6,40,235 is stated to have been drawn by the applicant in favour of the opposite party No.2 bearing No. 000214 dated 26.07.2024 which was dishonoured on 31.07.2024 with the remark 'funds insufficient', a statutory notice was issued on 6.08.2024 and thereafter, the complaint was lodged. Thereafter on 5.3.2025, the applicant has been summoned.

4. Learned counsel for the applicant has submitted that the summoning order cannot be sustained for more than one reason. Further submission is that the complaint was not maintainable at all particularly when the Jheel Plyhouse was not made a party neither in the complaint nor it was summoned.Next submission is that in view of the judgment in the case of Aneeta Hada Vs. Godfather Travels & Tours (P) Ltd. (2012) 5 SCC 661, the company namely Jheel Plyhouse was a necessary proper party and in absence of arraigning of the said company as an accused, the complaint is not bound to succeed. It is further contended that even otherwise the Magistrate prior before summoning the applicant has not recorded these statements under Sections 200 and 202 of the Cr.P.C. and there has been a clear violation of these statutory provisions which was mandatory required to be complied with before summoning the applicants. It is also contended that Dipanshu Agarwal had without disclosing his designation and the capacity had filed an affidavit in the form of his statement, thus, the summoning order cannot be sustained. It is further contended that the summoning order is cryptic and the same be set aside.

5. Learned AGA on the hand submits that there is no requirement of recording of statements under Sections 200 and 202 of the Cr.P.C. in the matters pertaining to N.I. Act and further non- arraigning, of the firm would not be material and of relevance.

6. I have heard the submissions so made across the bar and perused the material on record. Apparently, with respect to the dishonour of a cheque, a statutory demand notice was issued and a complaint came to be filed. The first and the foremost argument raised by the learned counsel for the applicant that in absence of arraigning the firm Jheel Plyhouse as an accused, the complaint would fall, cannot be accepted for the simple reason that a perusal of the complaint would show that it is a sole proprietorship firm and Ankit Singh is the sole proprietor. There is a distinction between a company, partnership and a sole proprietor as a company comprises of directors whereas the partnership firm comprises of more than one partner. However in the sole proprietorship, there is only one person, who is the sole proprietor.

7. This court in the case of Abhishek Jain vs. State of U.P. & others, (2023) 0 Supreme (Alld.) 1581 in para 16 has observed as under:- "16. From the aforesaid observations made by the Apex Court, it is crystal clear that if the cheque is issued in the name of a firm, whether proprietorship or partnership firm, the proprietor or the partner as the case may be, becomes the holder in due course and he can sue in his own name and it is not necessary for him to sue in a trading name, though others can sue such firm in the trading name. Therefore, the instant complaint filed by the opposite party no.2, claiming himself to be a proprietor of the said firm in whose name the said cheque is issued by the applicant herein, in the considered opinion of this Court, complaint is maintainable. Even if the contention of applicant be accepted that the said Raj Rajeshwari Enterprises is a partnership and not a proprietorship firm, it will not help the applicant herein as even the partnership firm does not have a different legal identity and is not a juristic person. Therefore, a partner of the firm also becomes the holder in due course of the cheque within the meaning of Section 142 (1) of the N.I. Act. Thus, the complaint even on behalf of the partner of a firm in his own name is maintainable. Otherwise, also in the instant case, the applicant does not dispute that the cheque was issued in the name of the said Raj Rajeshwari Enterprises and the said cheque was dishonoured and demand notice was issued by the opposite party no.2, he has failed to comply with the said notice. Therefore, in view of the presumption under Section 139 of the N.I. Act and as per the law laid down by the Apex Court, this Court does not find any good ground to interfere in the instant case in exercise of jurisdiction under Section 482 Cr.P.C. "

8. Thus the rigours of Section 141 of the N.I. Act would not play in so far as sole proprietorship is concerned.

9. In so far as the other arguments raised by the learned counsel for the applicant that under Sections 200 & 202 of the Cr.P.C. statements were mandatory required required it before summoning the applicant, the same is also not convincible as the Hon'ble Apex Court in a, Constitution Bench of Hon'ble Supreme Court In Re.: Expeditious Trial of Cases Under Section 138 N.I. Act 1881 reported in AIR 2021 Supreme Court 1957 in paragraph- 12 observed as under:- "12. Another point that has been brought to our notice relates to the interpretation of Section 202 (2) which stipulates that the Magistrate shall take evidence of the witness on oath in an inquiry conducted under Section 202 (1) for the purpose of issuance of process. Section 145 of the Act provides that the evidence of the complainant may be given by him on affidavit, which shall be read in evidence in any inquiry, trial or other proceeding, notwithstanding anything contained in the Code. Section 145 (2) of the Act enables the court to summon and examine any person giving evidence on affidavit as to the facts contained therein, on an application of the prosecution or the accused. It is contended by the learned Amici Curiae that though there is no specific provision permitting the examination of witnesses on affidavit, Section 145 permits the complainant to be examined by way of an affidavit for the purpose of inquiry under Section 202. He suggested that Section 202 (2) should be read along with Section 145 and in respect of complaints under Section 138, the examination of witnesses also should be permitted on affidavit. Only in exceptional cases, the Magistrate may examine the witnesses personally. Section 145 of the Act is an exception to Section 202 in respect of examination of the complainant by way of an affidavit. There is no specific provision in relation to examination of the witnesses also on affidavit in Section 145. It becomes clear that Section 145 had been inserted in the Act, with effect from the year 2003, with the laudable object of speeding up trials in complaints filed under Section 138. If the evidence of the complainant may be given by him on affidavit, there is no reason for insisting on the evidence of the witnesses to be taken on oath. On a holistic reading of Section 145 along with Section 202, we hold that Section 202 (2) of the Code is inapplicable to complaints under Section 138 in respect of examination of witnesses on oath. The evidence of witnesses on behalf of the complainant shall be permitted on affidavit. If the Magistrate holds an inquiry himself, it is not compulsory that he should examine witnesses. In suitable cases, the Magistrate can examine documents for satisfaction as to the sufficiency of grounds for proceeding under Section 202."

10. A coordinate Bench of this Court Application U/S 482 No.14051 of 2008, Virendra Kumar Sharma vs. State of U.P. and another decided on 8.12.2021 has observed as under:- "Thus, it is clear from the above judgement of Hon'ble Supreme Court that even on the basis of affidavit filed on behalf of the complainant, an accused can be summoned under Section 138 Negotiable Instruments Act and there is no need to record statements under Sections 200 and 202 Cr.P.C."

11. As regards the submission of the learned counsel for the applicant that in the affidavit in the form of statement one Depanshu Agarwal has not disclosed his designation and capacity is concerned, the same would not be the ground to throttle the investigation at this stage. The defect, if any, is curable or not is the subject matter of trial and it might be a ground for consideration at this stage, when the decision is to be taken as to whether it is the case for conviction or acquittal. Even otherwise once a cheque stood drawn then the presumption under Section 139 of the N.I. Act is always in favour of the holder.

12. Accordingly, no ground is made out. The application stands rejected. Order Date :- 6.5.2025 piyush