P. Muthuraman vs Padmavathi Finance (Regd.)

S.M. Ali Mohamad, J.—This is a petition filed u/s 482 of the Criminal Procedure Code to call for the records in CC. No. 3504 of 1992 on

the file of XVI Metropolitan Magistrate, George Town, Madras, and to quash the same.

The complaint was filed under sections 138 and 142 of the Negotiable Instruments Act, 1881, by the complainant, Shree Padmavathi Finance,

a partnership firm represented by its partner T. K. Subramani. It was averred in the complaint that the accused borrowed a sum of Rs. 25,000 and

executed a promissory note dated December 3, 1990, to repay the said amount and borrowed a further sum of Rs. 25,000 by executing a second

promissory note dated December 3, 1990. After giving credit to the amount paid by the accused a sum of Rs. 20,875 was due under both

promissory notes. The petitioner accused issued a cheque bearing No. 659832 for sum of Rs. 20,875 dated March 20, 1992, drawn on the State

bank of Travancore, Madras (Main Branch) and signed the cheque as proprietor of Sri Saravana Transport Co. The said cheque was presented

on April 23, 1992, by the complainant and it was returned by the bank on April 25, 1992, with an endorsement, ""not arranged for"". After

completing the issue of notices, the complainant filed the complaint.

The only contention submitted by learned counsel for the petitioner is that he is the sole proprietor of Sri Saravana Transport Co. and Sri

Saravana Transport Co. was not made a party in the and as such there is infirmity in the complaint and the same ought to be quashed. I am unable

to accept the contention of learned counsel for the petitioner. The sole proprietary concern is not a legal entity apart from the sole proprietor and,

therefore, there is no need to make the sole proprietary concern a party in the complaint. Offences by companies are dealt with u/s 141 of the

Negotiable Instruments Act, 1881, which is as follows :

Offences by companies. - (1) If the person committing an offence u/s 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 under 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.

(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, manger,

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 purpose of this section, -

(a) ''company'' means and body corporate and includes a firm or other association of individual; and

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

It is clear that if the person committing an offence u/s 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. In this connection it is pertinent to point out the

Explanation u/s 141 of the Negotiable Instruments Act. The term ""company"" is defined in the Explanation to section 141 to mean (1) any body

corporate and (2) includes a firm or (3) other associations of individual; and ""director"" in relation to a firm, means a partner in the firm. There is,

thus, no mention of any sole proprietary concern under the definition of ""company"". Further, other associations of individuals will not include a sole

proprietary concern as there is only one person and not an association of persons. As the sole proprietary concern is not a company within the

meaning of company as defined under the Explanation to section 141 of the Negotiable Instruments Act, 1881, the sole proprietary concern need

not be made a party in the complaint apart from the sole proprietor. In view of the above, the petition is dismissed.