M/S Neel Jewelers Gorakhpur Thru ... vs State Of U.P. Thru Addl. Cheif Secy ...
2022 Latest Caselaw 62 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

										A.F.R.
 
Court No. - 35								
 
Case :- CRIMINAL REVISION No. - 62 of 2022
 
Revisionist :- M/S Neel Jewelers Gorakhpur Thru Its Proprietor And Another
 
Opposite Party :- State Of U.P. Thru Addl. Chief Secy Govt Of U.P. Civil Sectt And Another
 
Counsel for Revisionist :- Baljeet Singh, Suneel Kumar
 
Counsel for Opposite Party :- G.A.
 

 
Hon'ble Subhash Vidyarthi,J.

1. Heard Mr. Baljeet Singh Advocate, learned counsel for the revisionists as well as learned AGA for the State and perused the record.

2. By means of the instant Criminal Revision under Section 397/401 of the Code of Criminal Procedure, 1973, the revisionists have challenged the validity of the order dated 18.10.2021 passed by the Presiding Officer, Additional Court No. 2, Lucknow in Complaint Case No. 6823 of 2019 (M/s Seven Seas Net Mart Sales Pvt. Ltd. vs. M/s Neel Jewellers and another) under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ''the Act') rejecting the application filed by the revisionists for being exonerated of the liabilities/obligations mentioned in the complaint.

3. The facts of the case, briefly stated, are that on 19.08.2019 the opposite party no. 2-complainant filed a complaint under Section 138 of the Act inter alia stating that the revisionist no. 1 is a proprietorship firm in the proprietorship of the revisionist no. 2, who is a regular customer of the complainant company. During the course of business, the revisionist no. 1 took supply of some items from the complainant and to pay the price of the goods it issued some cheques. A cheque bearing no. 044778 dated 06.06.2019 drawn on Allahabad Bank, City Office Branch, Gorakhpur for Rs. 3,00,000/- only, which was signed by the revisionist no. 2 was dishonored with the endorsement "payment stopped by the drawer". It is stated in the complaint that the action of the revisionists is punishable under Section 138 read with Section 141 of the Act and the revisionist no. 2, the proprietor of the revisionist no. 1 was responsible for conducting the business of the proprietorship firm at the relevant time when the aforesaid offence was committed.

4. The learned Additional Chief Judicial Magistrate, VIIIth, Lucknow recorded the statement of the complainant under Section 200 Cr.P.C. in the form of an affidavit dated 19.08.2019. The complainant gave his statement under Section 200 Cr.P.C. through his affidavit dated 19.08.2019 and he adduced the original cheque in question, the memo issued by the Bank, a copy of the registered notice and the postal receipt as evidence under Section 202 Cr.P.C.. After taking into consideration the aforesaid material, the learned Court below has come to the conclusion that from the material/evidence available on the record, an offence under Section 138 of the Act is made out against the accused persons/revisionists and has passed an order summoning the revisionists for being tried for the aforesaid offence.

5. After passing of the aforesaid order, the revisionist approached this Court by filing an Application under Section 482 Cr.P.C. No. 1901 of 2021 and after arguing the matter at some length, the learned counsel for the applicants (revisionists) submitted that he did not want to press the aforesaid application under Section 482 Cr.P.C. on merits and he confined his prayer only to the extent that the applicants be permitted to move a discharge application through counsel and suitable directions may be issued for expeditious disposal of the same.

6. The aforesaid application No. 1901 of 2021 was accordingly disposed of vide order dated 22.06.2021 providing that the applicants may move their discharge application through counsel and the same shall be heard and decided, expeditiously, after hearing the parties, in accordance with law, by means of a reasoned and speaking order.

7. Thereafter, the revisionists filed an application before the learned Court below for being exonerated of the liabilities under the complaint, without mentioning the provision of law under which the application was filed.

8. The learned counsel for the revisionists has submitted that in the aforesaid application it was mentioned that ''in para 11 of the complaint a prayer has been made to punish the revisionists under Section 141 of the Negotiable Instruments Act, 1881' and that the revisionist no. 1 is neither a company registered under the Companies Act nor is it a firm and, therefore, Section 141 of the Act does not apply to the revisionist no. 1. He submitted that for this reason the complaint is not maintainable and the revisionists ought to be exonerated of the liabilities under the complaint.

9. The opposite party no. 2 filed objections against the aforesaid application inter alia stating that the complaint under Section 138 of the Act has to be decided by the Court through a summary trial. There is no provision in law for filing of a discharge application during a summary trial. Besides this, Section 258 Cr.P.C. also does not apply to cases arising out of a complaint. On this ground, the application filed by the revisionists is not maintainable and is liable to be dismissed. It was further stated in the objections that the Trial Court does not have the jurisdiction to recall or review the order passed by itself and it has no power to recall or review an order passed by it summoning the accused-persons.

10. After hearing the aforesaid application of the revisionists and the objections against it filed by the opposite party no. 2, the learned Court below proceeded to pass the impugned order dated 18.10.2021 whereby the revisionists' application was rejected.

11. Dealing with the objection of the revisionists regarding mentioning of Section 141 of the Act, the learned Court below has stated that in the entire complaint, the revisionist no. 1 has been referred to as a proprietorship firm and the revisionist no. 2 as its proprietor. Mere mention of Section 141 of the Act in the complaint, for whatever reason, may not lead to a conclusion at this stage that the complaint is not maintainable.

12. Dealing with the second submission made on behalf of the revisionists during oral submissions, that no evidence has been led by the complainant under Section 202 Cr.P.C., the learned Court below has held that the documents adduced by the complainant can be taken into consideration under Section 202 Cr.P.C. The learned Court below has referred to the decision of the Hon'ble Supreme Court in the case of In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881; 2021 SCC OnLine SC 325 in which it has been held that there is no inherent power of Trial Courts to review or recall the issue of summons.

13. Mr. Baljeet Singh, learned counsel for the revisionists has assailed the validity of the aforesaid order dated 18.10.2021 mainly on the ground that the application for discharge had been filed by the revisionist on the direction of this Court vide order dated 22.06.2021, which has wrongly been rejected by the learned Court below as not maintainable.

14. The second submissions advanced by the learned counsel for the revisionists is that under Section 141 of the Act, action can only be taken against a company whereas the revisionist no. 1 is a proprietorship firm and not a company and, therefore, it cannot be proceeded with under Section 141 of the Act.

15. It has also been submitted that the learned Court below has summoned the revisionists without recording the statement of the opposite party no. 2 under Section 202 Cr.P.C. and the said fact has not been considered by the learned Trial Court while rejecting the discharge application.

16. The learned AGA has opposed the revision and submitted that there is no illegality or infirmity in the impugned order.

17. I have considered the submissions made by the parties' counsel and gone through the record.

18. The submission of the learned counsel for the revisionists, that the application for discharge was filed on the direction issued by this Court in the order dated 22.02.2021 passed in Application under Section 482 Cr.P.C. No. 1901 of 2021, is apparently wrong, as by means of the aforesaid order, this Court had merely granted a liberty to the revisionists to move an application and the application was directed to be decided in accordance with the law, which includes the law regarding its maintainability. Therefore, the learned Court below has not committed any illegality in examining the maintainability of the application.

19. As has already been noted above, the application does not mention the provision of law under which it has been moved presumably because there is no such provision.

20. In Adalat Prasad vs. Rooplal Jindal & others; (2004) 7 SCC 338, the Hon'ble Supreme Court was pleased to declare the law in the following words: -

"But after taking cognizance of the complaint and examining the complainant and the witnesses if he is satisfied that there is sufficient ground to proceed with the complaint he can issue process by way of summons under section 204 of the Code. Therefore what is necessary or a condition precedent for issuing process under section 204 is the satisfaction of the Magistrate either by examination of the complainant and the witnesses or by the inquiry contemplated under section 202 that there is sufficient ground for proceeding with the complaint hence issue the process under section 204 of the Code. In none of these stages the Code has provided for hearing the summoned accused, for obvious reasons because this is only a preliminary stage and the stage of hearing of the accused would only arise at a subsequent stage provided for in the latter provision in the Code. It is true as held by this Court in Mathew's case before issuance of summons the Magistrate should be satisfied that there is sufficient ground for proceeding with the complaint but that satisfaction is to be arrived at by the inquiry conducted by him as contemplated under sections 200 and 202, and the only stage of dismissal of the complaint arises under section 203 of the Code at which stage the accused has no role to play therefore the question of the accused on receipt of summons approaching the court and making an application for dismissal of the complaint under section 203 of the Code for a reconsideration of the material available on record is impermissible because by then Section 203 is already over and the Magistrate has proceeded further to Section 204 stage."

21. The aforesaid law laid down in Adalat Pasad (supra) has been followed and reiterated by the Hon'ble Supreme Court in its subsequent decisions in Bholu Ram vs. State of Punjab; (2008) 9 SCC 140, Subramanium Sethuraman vs. State of Maharashtra (2004) 13 SCC 324, N.K. Sharma vs. Abhimanyu (2005) 13 SCC 213, Everest Advertising (P) Ltd. Vs. State (Govt. of NCT of Delhi) (2007) 5 SCC 54 and Irish Computers Ltd. vs. Askari Infotech (P) Ltd.; (2015) 14 SCC 399.

22. Once the Court issues process to the accused/opposite party on a complaint under Section 138 of the Act, there is no provision for recall of the process. The only provision for stopping the proceedings in a certain cases is given in Section 258 Cr.P.C., which provides as follows:-

"258. Power to stop proceedings in certain cases. In any summons- case instituted otherwise than upon complaint, a Magistrate of the first class or, with the previous sanction of the Chief Judicial Magistrate, any other Judicial Magistrate, may, for reasons to be recorded by him, stop the proceedings at any stage without pronouncing any judgment and where such stoppage of proceedings is made after the evidence of the principal witnesses has been recorded, pronounce a judgment of acquittal, and in any other case, release the accused, and such release shall have the effect of discharge."

23. In In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 (supra), the Hon'ble Supreme Court has held that Section 258 cannot come into play in respect of the complaint filed under Section 138 of the Act. Affirming the earlier decisions in the Adalat Prasad (supra), the Hon'ble Supreme Court held that the Trial Court cannot be conferred with inherent power either to review or recall the order of issuance of process. Therefore, keeping in view the law laid down by the Hon'ble Supreme Court, the conclusion of the learned Court below that it has no jurisdiction to recall or review the order passed by itself summoning the accused does not suffer from any legal infirmity and needs no interference by this Court in exercise of its revisional power under Section 397/401 Cr.P.C.

24. Now I come to the second submission of the learned counsel for the revisionists seeking discharge on the ground that the complaint makes a mention of Section 141 of the Act, which does not apply because revisionist No. 1 is a proprietorship concern. Section 141 of the Act provides as follows:

"141 Offences by companies. -- (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:

[Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.]

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.-- For the purposes of this section,--

(a) "company" means any body corporate and includes a firm or other association of individuals; and

(b) "director", in relation to a firm, means a partner in the firm."

25. It is specifically pleaded in the complaint that the revisionist no. 1 is a proprietorship firm and the revisionist no. 2 is its proprietor and this fact has not been disputed by the revisionists. It is nobody's case that the revisionist no. 1 is a company incorporated under the provisions of the Companies Act or a registered firm.

26. A proprietorship concern is not a juristic person. It is merely a trade name used by a person for doing his business. A person may carry on a business in the name of the proprietorship concern but he being the proprietor of the business, would be solely responsible for all the actions and liabilities of the proprietorship concerned. It is correct that the provisions of Section 141 of the Act have no bearing to the present case where the revisionist no. 1 is not a company.

27. The stand taken by the revisionists in the application for discharge is that in para 11 of the complaint, a prayer has been made to punish the revisionists under Section 141 of the Act. No punishment is prescribed under Section 141 of the Act which has been reproduced above and the revisionists have not been summoned for being punished under Section 138 of the Act only and not under Section 141.

28. So far as the legal position of the revisionist no. 1 as proprietorship firm is concerned, the following pronouncements of the Hon'ble Supreme Court in Raghu Lakshminarayan vs. Fine Tubes; (2007) 5 SCC 103 throws light on the subject. The relevant observation of the Court is reproduced below: -

"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 Indian 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 terms of the explanation appended to Section 141 of the Negotiable Instruments Act, means any body- corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a Company, incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Indian Partnership Act."

29. In view of the aforesaid discussions, as the revisionist no. 1-M/S Neel Jewelers Gorakhpur-a proprietorship firm, is not a legal entity. No legal proceedings can be initiated by or against it and this principle of law would apply even for filing of the instant revision by the revisionist no. 1. However, the revisionist no. 2, proprietor of the revisionist no. 1, has also been arrayed as a party in the compliant and he has been summoned for being tried for committing an offence under Section 138 of the Act by the learned Court below. The revisionist No. 2 being the proprietor of the revisionist No. 1, is solely responsible for all its action and liability including the liability to face prosecution under Section 138 of the Act for dishonour of a cheque, which was drawn by the revisionist No. 2 himself.

30. So far as the last submission of the learned counsel for the revisionists that the learned Trial Court had committed a legal error in proceeding to summon the accused-persons without recording the statement of the complaint under Section 202 Cr.P.C. is concerned, the same also does not appear to have any force. Before issuing the summoning order dated 25.11.2019, the learned Court below has taken into consideration the affidavit of the complainant filed in support of the complaint under Section 200 Cr.P.C. and the documentary evidence filed by the complaint i.e., the original cheque in question, the memo issued by the Bank, a copy of the registered notice and the postal receipt, as evidence under Section 202 Cr.P.C. Sub Section (2) of Section 202 Cr.P.C. is not applicable to the proceedings of a complaint under Section 138 of the Act.

31. Section 145 of the Negotiable Instruments Act, 1881 provides as follows: -

"145. Evidence on affidavit.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the evidence of the complainant may be given by him on affidavit and may, subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said Code.

(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein."

32. In In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 (supra), the Hon'ble Supreme Court has been pleased to hold that Section 202 (2) of the Code in respect of examination of witnesses on oath is not applicable to the complaints filed under Section 138 of the Act. 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 the witnesses. In suitable cases, the Magistrate can examine documents for satisfaction as to the sufficiency of grounds for proceeding under Section 202 Cr.P.C. As the Magistrate has taken into consideration the complainant's affidavit and the documentary evidence on record, he has complied with the mandate of Section 202 Cr.P.c. Therefore, the submission of the learned counsel for the revisionists regarding non-compliance of Section 202 Cr.P.C. is also without any force and is hereby rejected.

33. In view of the aforesaid reasons, this Court does not find any illegality in the impugned order dated 18.10.2021 passed by the learned Court below in Complaint Case No. 6823 of 2019.

34. Accordingly, the instant Criminal Revision lacks merits and is hereby dismissed at the admission stage. The learned Court below may proceed with the trial of Complaint Case No. 6823 of 2019 under Section 138 of the Negotiable Instrument Act against the revisionist No. 2 as being the Proprietor of M/s Neel Jewelers, the entire liability for its action lies on the revisionist No. 2.

[Subhash Vidyarthi, J.]

Order Date :- 1.2.2022

Santosh/-/Jaswant