M M Lal vs State Nct Of Delhi & Anr.
2012 Latest Caselaw 5544 Del

$~21
*IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CRL.L.P. 290/2010

                                 Decided on 14th September, 2012

       M M LAL                                        ..... Petitioner
                           Through            :Mr. Sunil Sethi, Adv.

                    Versus

       STATE NCT OF DELHI & ANR.                  ..... Respondents
                           Through            Mr. Mukesh Gupta,
                                              APP for respondent no.
                                              1
       CORAM:
       HON'BLE MR. JUSTICE A.K. PATHAK

A.K. PATHAK, J. (ORAL)

1. By this petition under Section 378(4) Cr.P.C., petitioner seeks

leave to appeal against the judgment dated 31st March, 2010 passed by

Trial Court, whereby complaint under Section 138 of the Negotiable

Instruments Act, 1881 (for short hereinafter referred to as "the Act")

has been dismissed and respondent no. 2 has been acquitted of the

charge under Section 138 of the Act.

2. Brief facts are that the petitioner filed a complaint under

Section 138 of the Act against respondent no. 2, proprietor of M/s.

Tina Toni Creations, New Delhi. It is alleged that the respondent no.

2 was proprietor of M/s. Tina Toni Creations. He had issued a cheque

bearing No. 822256 dated 1st October, 1994 for `10.5 lacs in favour of

petitioner in discharge of his loan liability of`10 lacs, which was

taken on interest @ 20% per annum.

3. On presentation, cheque was returned dishonored with the

remark "funds insufficient", vide a return memo dated 3 rd October,

1994. Amount involved in the cheque was not paid within 15 days of

service of legal notice dated 6th October, 1994, hence, respondent no.

2 had committed offence punishable under Section 138 of the Act.

4. During the trial, respondent no. 2 has succeeded in showing

that he was not the sole proprietor of M/s. Tina Toni Creations. Shri

Manmohan Dhawan was the proprietor. Trial Court has noted that

Manmohan Dhawan was not impleaded as proprietor of said firm.

Respondent no.2 Gopal was, thus, not liable to pay the cheque

amount.

5. It is well settled that a sole proprietorship firm has no separate

legal identity and in fact is a business name of the sole proprietor.

Thus any reference to sole proprietorship firm means and includes

sole proprietor thereof and vice versa. Sole proprietorship firm would

not fall within the ambit and scope of Section 141 of the Act, which

envisages that if the person committing an offence under Section 138

is a company, every person who, at the time of 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. Company includes a

partnership firm and any other association of individuals. The sole

proprietorship firm would not fall within the meaning of partnership

firm or association of individual. Vicarious liability cannot be

fastened on the employees of a sole partnership firm, by taking aid of

Section 141 of the Act, inasmuch as, no evidence has been led to

show that the business was run by the respondent no.2.

6. Learned counsel for the petitioner has contended that DW1 has

produced „Letter of Mandate‟ executed by the proprietor of M/s Tina

Toni Creations, which shows that the respondent no.2 was authorized

to operate bank account of the firm. In my view, "Letter of Mandate"

issued by the sole proprietor in favour of respondent no. 2 will not

make him personally liable to pay the debts of the firm. A perusal of

Mandate clearly indicates that the respondent no.2 was only given

authority to draw bills, cheques etc. in the said account but any

liability on that count was to be that of sole proprietor. The clause to

this effect reads thus "This mandate if not revoked in my/own life

time shall be binding upon my/own estate and effects and any leagal

respresentatives unless a written notice of my/own death is given to

you". That apart mandate binds the parties to the letter of „Mandate‟,

that is bank and the sole proprietor and not the outsiders.

7. Accordingly, I do not find any perversity in the view taken by

trial court that the cheque having been issued from the account

maintained by M/s. Tina Toni Creations of Shri Manmohan Dhawan

respondent no. 2, namely, Gopal could not have been prosecuted and

punished.

8. Petition is, thus, dismissed.

A.K. PATHAK, J.

SEPTEMBER 14, 2012 rb