1. Since in both these applications seeking Special Leave to Appeal filed under Section 378(4) of the Code of Criminal Procedure involves similar set of facts between the same parties raising similar question of law, both these applications are heard and decided by this common order.

2. In Criminal Miscellaneous Application No.3045 of 2023 , the original complainant- present applicant seeks permission of this Court to prefer appeal against the impugned judgment and order dated 30.04.2022 passed by the learned Additional Judicial Magistrate, Vadodara in Criminal Case No.1323 of Page 1 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined 2013.

2.1. Similarly in Criminal Miscellaneous Application No.3089 of 2023, the original complainant- present applicant seeks permission of this Court to prefer appeal against the impugned judgment and order dated 30.04.2022 passed by the learned Additional Judicial Magistrate, Vadodara in Criminal Case No.1324 of 2013.

2.2. By the aforesaid impugned judgment and order, the learned Magistrate has proceeded to record acquittal of the present respondent- original accused for the offence alleged under Section 138 of the Negotiable Instruments Act.

3. In brief the facts as emerged on record is that; 3.1. The appellant is an unregistered partnership firm. The respondent accused is engaged in the business of extending services in the name of Super Hospitality Services Private Limited and applicant is engaged in wholesale business of grains. It is the case of the original complainant -partnership firm that because of the business relationship the parties were known to each other since last five years. The complainant firm used to provide goods on credit. Initially, the respondent - accused used to make regular payment of the purchased goods in time, however, since year 2010-11 to 2011-12, the respondent- accused had failed to make payment of the goods taken on credit and the complainant had raised the recovery of such amount of Rs.4,10,708/- from the respondent accused.

NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined 3.2. Against such outstanding amount, the respondent-accused had handed over eight cheques of State Bank of India, Alkapuri Branch, Vadodara between the period 22.10.2012 to 22.11.2012. The details of such cheques are as under:

3.3. The aforesaid cheques were drawn by the respondent no.1 in his capacity as Director of the Super Hospitality Services Private Limited Company. It is further contended by the complainant that the aforesaid cheques were presented for realization of the outstanding amount. However, cheque bearing no.187628, dated 20.11.2012 for an amount of Rs.50,000/- was returned back. Similarly, cheque bearing no.187629, dated 22.11.2012 for an amount of Rs.50,000/- and cheque bearing no.187630, dated 22.11.2012 for an amount of Rs.59589/- were also returned back on 23.11.2012. The return of of such cheques were reported by the concerned Bank by its communication dated 24.11.0212. Thus, the complainant was constrained to raise demand of the aforesaid outstanding amount of three cheques by sending legal notice dated 10.12.2012 by registered Post AD upon the respondents-

NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined accused.

3.4. According to the complainant, the aforesaid legal notice though duly served as evident from the acknowledgment slip received by the complainant on 5.12.2012 with an endorsement of 10.12.2012 by the accused, the accused has chosen not to make payment of aforesaid outstanding amount. The complainant had, therefore, approached the Court of learned Additional Judicial Magistrate, Vadodara by lodging complaint under Section 138 of the Negotiable Instruments Act on 10.01.2013. The aforesaid complaints were registered as Criminal Case No.1323 of 2013 and 1324 of 2013.

4. The learned Magistrate upon recording verification of Manishbhai Jagdishbhai Patel who claims to be the partner of complainant firm i.e. Manish Trading Company, proceeded to issue summons upon the respondent -accused and summons were duly served upon the respondent accused. The accused had appeared before the learned Magistrate and his plea was recorded wherein the accused has denied the case of the complainant. The learned Magistrate had proceeded with the summary trial of the complaint.

4.1. The said witness- Manishbhai Jagdishbhai Patel who claims to be the partner of the complainant firm has entered into the witness box and has given his evidence which is recorded at Exh.7. The complainant has examined one witness viz. Jagdishbhai Govardhanbhai Patel at Exh.34. Apart from the aforesaid oral evidence, documentary evidence which mainly Page 4 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined include three disputed cheques (Exhs.14 to 16), demand notice (Exh.17), Postal window slip (Exhs. 18 & 19), Postal acknowledgment slip (Exhs. 20 & 21) and different credit memo issued in the name of Manish Trading Company (Exhs. 61 to

4.2. On the other hand, the Director of the respondent no.1 Company i.e. Keshav Narayan Alava has appeared before the trial Court and his statement is recorded under Section 313 of the Code of Criminal Procedure. Apart from the denial to the questions put to the respondents-accused, the defence is raised by the accused that the complainant has misused the cheques which were otherwise taken under coercion and a false complaint is lodged to extort money.

5. The learned Magistrate after considering the aforesaid evidence as well as statement made by the learned counsel representing the respective parties has dismissed the complaint holding it as not maintainable. The learned Magistrate has noticed the fact that the disputed cheques were drawn in the name of payee i.e. "Manish Trading Company" whereas the cause title of the original complaint suggest that the complaint is lodged by one Manish Jagdishbhai Patel in his capacity as partner of "Manish Trading Company". According to the learned Magistrate, the complaint is not filed through or on behalf of aforesaid partnership firm as contended by the original complainant before the trial Court. The learned Magistrate has further taken into consideration the fact that no documentary evidence has been brought on record to establish the fact that Page 5 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined the Manish Trading Company is a registered Partnership Firm and Manish Jagdishbhai Patel is partner of the said firm. With such observations, learned Magistrate has dismissed the complaint as not maintainable.

6.Being aggrieved and dissatisfied with the aforesaid order of dismissing the complaint passed by the learned Magistrate which has ultimately resulted into the acquittal of the respondent -accused, belatedly the original complainant has approached this Court seeking special leave to appeal under Section 378(4) of the Code of Criminal Procedure. The application seeking condonation of delay was filed separately whereby this Court by order dated 13.07.2023 has condoned the delay caused in filing Special Leave to Appeal along with appeal.

7. I have extensively heard Mr. Viral Vyas, learned advocate who has appeared on behalf of Mr. Ashish Dagli, learned advocate on record for the applicant and Mr. Himanshu Desai, learned advocate who has appeared on behalf of the respondent nos. 2 and 3 respectively. Noticing the issue involved in the matter, lies in the narrow compass viz. with regard to maintainability of the complaint at the instance of an unregistered partnership firm, application seeking special leave to appeal along with the appeal was finally heard with the consent of the learned advocates for the respective parties. The matter had reserved for orders.

8. Learned advocate for the applicant - original complainant has contended before the Court learned Magistrate committed Page 6 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined serious error in not appreciating the fact that cheques were drawn in the name of proprietor firm i.e. "Manish Trading Company", and the complaint filed by the Manish Jagdishbhai Patel in his capacity as partner of the said firm was maintainable. The documentary evidence brought on record by the original complainant goes to suggest that the cheques were issued for discharge of the legal liabilities incurred by the respondent accused during the course of business transaction with the said partnership firm and the cheques were returned back on account of "insufficient fund". The factum of dishonour of cheque has also been proved before the learned trial Court. According to the learned advocate, there was sufficient compliance of the mandatory provisions of Section 138 of the Negotiable Instruments Act. In absence of any challenge to the signature on the disputed cheque, the learned Magistrate ought to have raised presumption in favour of the complainant and in absence of any rebuttal of such presumption though the defence of misuse of cheque was raised, the learned Magistrate ought to have called upon the respondent-accused to lead some cogent material to establish such defence. In absence of any defence being established the presumption which had already arose in favour of complainant firm had remained intact as being unchallenged and in that case, offence under Section 138 of the Negotiable Instruments Act was attracted.

9. During the course of arguments, learned advocate has referred to the grounds raised in the memo of appeal. By referring to the grounds, it was urged before this Court for the first time that Manish Trading Company is a registered Page 7 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined partnership firm and is registered with the Registrar of Firm and even certificate of registration is issued by the Vadodara Municipal Corporation which is with regard to existence of establishment. He, therefore, urged this Court to remand the matter back to the learned Magistrate to examine the case on merits by directing to restore the complaint.

10. On the other hand, the aforesaid submissions of the learned advocate for the appellants were objected by the learned advocate on record for the respondent- original accused. It was submitted by the learned advocate for the respondent that no cogent material has been brought on record to satisfy that there exists registered partnership firm in the name of "Manish Trading Company" and that the applicant viz. Manish Jagdishbhai Patel was partner of such firm. He further submitted that as per Section 69(2) of the Indian Partnership Act, learned Magistrate has rightly arrived at a conclusion that the complaint at the instance of the aforesaid firm in absence of any material being brought on record, to be not maintainable. He, therefore, submitted that no arguable case is raised by the applicant to grant special leave to appeal and has urged this Court to dismiss the appeal.

11. Having heard the learned advocate for the respective parties and having perused the impugned judgment and order passed by the learned Magistrate. the only question which falls for consideration of this Court in the present appeal is whether the learned Magistrate committed any error in dismissing the complaint as not maintainable in the facts of the case.

NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined Indisputably, it has transpired on record that the disputed cheques have been drawn in the name of "Manish Trading Company". As per the case of the complainant, the said trading company is a registered partnership firm and the applicant viz. Manish Jagdishbhai Patel is partner of the said firm. The learned Magistrate has proceeded to dismiss the complaint holding that no documentary evidence has been brought on record to establish the very existence of the partnership firm and the fact that the applicant -complainant is the partner of the said firm. In other words, the question of law as to whether the prosecution of the accused under Section 138 of the Negotiable Instruments Act is hit by bar created by sub-section (2) of Section 69 of the Indian Partnership Act, 1932 has been raised. The aforesaid question of law is no more res integra in view of the various decisions of the various High Courts as well as Hon'ble Supreme Court.

12. It would be appropriate to re-visit the the relevant provisions of Section 69 of the Indian partnership Act. Section 69 of the Indian Partnership Act reads as under:

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been Page 9 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined shown in the Register of Firms as partners in the firm.

(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect,--

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or

(b)the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920) to realise the property of an insolvent partner.

(4)This section shall not apply,--

(a)to firms or to partners in firms which have no place of business in[the territories to which this Act extends], or whose places of business in [the said territories], are situated in areas to which, by notification under [ section 56 ], this Chapter does not apply, or

(b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency- towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882 (5 of 1882), or, outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim. State Amendment."

The plain reading of sub-section (2) of Section 69 of the Act, 1932 provides that no suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

13. The aforesaid question fall for consideration before the Page 10 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined Division Bench of the Andhra Pradesh High Court in the case of Mr. Amit Desai and Another vs. M/s. Shine Enterprises and Another reported in 2000 Cri.LJ 2386, the Court took a view that enforcement of a legal liability has to be in the nature of civil suit because the debt or other liability cannot be recovered by filing a criminal case and when there is a bar of filing a suit by an unregistered firm, the bar equally applies to criminal case.

13.1.Thus, the view originally prevailed was that unregistered firm cannot enforce a debt against the third party as in view of the bar created under Section 69(2) of the Act. The debt cannot be termed as legally enforceable debt in view of explanation (2) of Section 138 of the Act. It would be relevant to note that in both the aforesaid cases the Courts have disagreed with the view taken by the Kerala High Court in the case of Abdul Gafoor vs. Abdulrahiman reported in (1999) 2 KLT 634 and in the case of Gurucharan Singh vs. State of UP and Another of Allahabad High Court reported in 2002 Cri. LJ3682.

13.2. Later on the Coordinate Bench of the Andhra Pradesh High Court while disagreeing with the view taken by the earlier Bench in the case of Mr. Amit Desai (supra) had referred to the question for consideration before the Larger Bench. The Larger Bench of the Andhra Pradesh High Court in the case of A V Ramanaiah vs. M. Shekhara reported in ALR(Cri) 2009(2) 801. After discussing the various case laws on the point arrived at a conclusion that bar contained under Section 69 (2) of the Act of 1932 would not be attracted for initiating any action by or against an unregistered partnership firm for the offence Page 11 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined committed under Section 138 of the Negotiable Instruments Act.

13.3.Subsequently, the learned Single Judge of the High Court of Mumbai in the case of Sai Accumulator Industries, Sangamner vs. Sethi Brothers, Aurangabad reported in 2016(5) Mh.LJ 936 while dealing with the appeal arising out of complaint filed by an unregistered firm under Section 138 of the Negotiable Instruments Act took a view that complaint was not tenable in law in view of the bar under Section 69(2) of the Act, 1932. The learned Single Judge had followed the ratio laid down by the Division Bench of the Andhra Pradesh High Court in the case of AV Ramanaiah (supra) as recorded in para 9, which reads as under:

13.4. The Coordinate Bench of our High Court in the case of Ruturaj Ayurvedic Gruh Udhyog and Another vs. Navnitlal and Company Through Devang Manojbhai Gandhi and Another reported in 2017(2) GLH 312 after taking into consideration the aforesaid judgment of the Bombay High Court in the case of Sai Accumulator Industries, Sangamner (supra) as well as Hon'ble Page 12 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined Division Bench of the Kerala High Court in the case of Kerala Arecanut Stores vs. Ramkishor and Sons and Another reported in AIR 1975 Kerala 144 agreed with the view taken by the Kerala High Court and held that the complainant though being unregistered partnership firm is entitled to sue and held the complaint to be maintainable. The Court has observed as under:

13. Even by plain reading of Section 69(2) of the Partnership Act leaves no scope for doubt that what is barred by the said section is the institution of a suit to enforce a right arising from a contract or conferred by the Partnership Act by or on behalf of any person suing as a partner in a firm against the firm, or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person in suit is or has been shown as a partner in the register of firms.

14.A careful reading of Section 69(2) of the Partnership Act clearly shows that an unregistered partnership firm is barred from filing a civil suit and there is no bar as such to file a private complaint and it is purely criminal liability on the part of the person who has issued the cheque. Even if the cheque issued by a partner of an unregistered firm for legally recoverable debt or otherwise and if such cheque dishonoured when it was presented for encashment, it amounts to a criminal liability. Therefore, the dismissal of a complaint by the Trial Court by relying on the decision of the Andhra Pradesh High Court referred to above is incorrect. Whenever a complaint is presented under Section 138 of the Page 13 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined Negotiable Instruments Act , it is the duty of the learned Magistrate to take note of the cognizance and record the sworn statement of the complainant and his witnesses and after hearing if there is any prima facie case then it is the duty of the Court to issue summons to the accused.

15. In the case of BSI Limited and another v. Gift Holdings Private Limited , reported in (2000)2 SCC 737, the Supreme Court held thus :

16. Again in the case of Gurcharan Singh v. State of Uttar Pradesh and Another , 2002(4) Crimes 165 (All), the Allahabad High Court has followed the above said judgment of the Supreme Court.

17. Therefore, in view of the above decision of the Supreme Court as well as of the other High Courts, the contention of the applicants that filing of a criminal complaint by a partner of an unregistered firm is hit by Section 69(2) of the Partnership Act cannot be accepted. The said section has no application to the criminal cases. Under these circumstances it could be said that Section 69(2) of the Partnership Act is applicable only where the civil rights are invoked and not in criminal cases. Nonregistration of the firm has no legal bearing on the criminal case.

18. Mr.Mangukiya, the learned counsel submits that his client may be given one opportunity to cross-examine the complainant."

In view of the aforesaid legal position, the issue with regard to the maintainability of complaint at the instance of unregistered partnership firm is thus held maintainable.

14. Having held so, the question which arise for consideration Page 14 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024 NEUTRAL CITATION R/CR.MA/3045/2023 ORDER DATED: 05/01/2024 undefined of this Court in the facts of the case is with regard to maintainability of complaint in the form and manner it is presented before the learned Magistrate. Though the learned advocate for the applicant has made attempt to contend that the firm is registered partnership firm and the applicant is one of the partner of the said firm, no documentary evidence as contended before this Court has been placed on record for consideration. In absence of such document, the very fact of holding authority for lodgement of complaint at the instance of the payee trading company i.e. "Manish Trading Company" is not established. In absence of any material about the existence of the firm and the applicant being the partner of the said firm, the very fact of lodging the complaint in his capacity as payee/ holder in due course is required to be dealt with before examining the merits of the case. In the facts and circumstances of the case when the applicant is not payee/ holder in due course, the complaint cannot be entertained at the behest of such applicant under Section 138 of the Act. Hence, no arguable case is made out to consider for grant of leave to appeal and is hereby refused. Consequently, the appeals also fail.

(NISHA M. THAKORE,J) KAUSHIK J. RATHOD Page 15 of 15 Downloaded on : Fri Jan 05 20:48:54 IST 2024