# Dhirendra Singh v. State of U.P. & Anr

- **Citation:** (2020) 11 ILRA 215
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-10-13
- **Case number:** Matters Under Article 227 No. 2231 of 2020
- **Bench:** Suresh Kumar Gupta
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/dhirendra-singh-v-state-of-u-p-anr-45385
- **Pages:** 5

## Headnote

Law-Negotiable
Instrument
Act,1881-Section
138-Cheques
were
dishonoured due to insufficient amountcomplain filed-Contended- Cheques were
issued by the firm and Petitioner is a
proprietor-firm not arraign as accusedPetitioner sole proprietor-no vicarious
liability may ever arise-no defect in
complaint lodged-Petition dismissed.

Held, Besides, in the case of a sole proprietary
concern, there are no two persons in existence.
Therefore, no vicarious liability may ever arise on
any other person. The identity of the sole proprietor
and that of his 'concern' remain one, even though
the sole proprietor may adopt a trade name
different from his own, for such 'concern'. Thus,
even
otherwise,
conceptually,
the
principle
contained in section 141 of the Act is not applicable
to a sole-proprietary concern. (para 15)

Petition dismissed. (E-9)

List of Cases cited:-

## Text

11 All. Dhirendra Singh Vs. State of U.P. & Anr.
215
custody before a Court of competent
jurisdiction by invocation of such remedy
as may be advised. In the event, the second
petitioner approaches a Court of competent
jurisdiction to establish his claim to the
minor's custody, it shall be determined by
that Court in accordance with law, without
being influenced anything said here.

22. In the result, this Habeas Corpus
Writ Petition fails and is dismissed. The
rule nisi is discharged.

23. However, the minor's father,
Akhilesh Sharma has a right to meet his
daughter and spend time with her.
Learned Counsel for the second petitioner
has said that unless provision is made for
visitation, the right of the father may
remain
a
dead
letter.
In
the
circumstances, it is ordered that the
second petitioner, Akhilesh Sharma shall
be entitled to visit his daughter, Km.
Vaibhavi Sharma at Surya Kant Sharma's
home, where she lives, on the second
Sunday of every month between 10:00
a.m. to 1:00 p.m. He will be allowed by
Surya Kanta Sharma to spend time with
his daughter. During each of these visits,
Surya Kant Sharma and other members of
his family shall extend all due courtesy to
Akhilesh Sharma. It would be open to the
parties to adjust the schedule of these
visitations, but not so as to deprive the
second petitioner of his right to visit his
daughter at least once a month for three
hours.

24. Let this order be communicated
by the Joint Registrar (Compliance) to the
learned District Judge, Bulandshahr, the
learned
Chief
Judicial
Magistrate,
Bulandshahr
and
the
Senior
Superintendent of Police, Bulandshahr.
----------
(2020)11ILR A215
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 13.10.2020

BEFORE

THE HON'BLE SURESH KUMAR GUPTA, J.

Matters Under Article 227 No. 2231 of 2020
(Criminal)

Dhirendra Singh ...Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Sri Deepak Kumar Kulshrestha

Counsel for the Respondents:
C.S.C.

Civil
Law-Negotiable
Instrument
Act,1881-Section
138-Cheques
were
dishonoured due to insufficient amountcomplain filed-Contended- Cheques were
issued by the firm and Petitioner is a
proprietor-firm not arraign as accusedPetitioner sole proprietor-no vicarious
liability may ever arise-no defect in
complaint lodged-Petition dismissed.

Held, Besides, in the case of a sole proprietary
concern, there are no two persons in existence.
Therefore, no vicarious liability may ever arise on
any other person. The identity of the sole proprietor
and that of his 'concern' remain one, even though
the sole proprietor may adopt a trade name
different from his own, for such 'concern'. Thus,
even
otherwise,
conceptually,
the
principle
contained in section 141 of the Act is not applicable
to a sole-proprietary concern. (para 15)

Petition dismissed. (E-9)

List of Cases cited:-

1. Aneeta Hada Vs M/s Godfather Travels &
Tours Pvt. Ltd

2. Devendra Kumar Garg Vs St. of U.P. & anr.
216 INDIAN LAW REPORTS ALLAHABAD SERIES
(Delivered by Hon'ble Suresh Kumar Gupta, J.)

1. The matter under Section 227 of
Constitution has been filed by petitioner to
set aside the impugned orders dated
31.10.2018 passed by Additional Court No.
3, Agra in Complaint No. 1500 of 2011
(Nepal Singh Vs. Dhirendra Singh) under
Section 138 of Negotiable Instruments Act,
1881 and the order dated 6.2.2020 passed
by Additional Sessions Judge, Court No.
17, Agra in Criminal Revision No. 552 of
2018 (Dhirendra Vs. State of U.P. and
Another) and to quash the summoning
order dated 28.3.2012 as well as entire
proceeding of Complaint Case No. 1500 of
2011 pending in the court of Additional
Court No. 3, Agra.

2. Brief facts of this case are as
follows-:

That respondent no. 2 stated that
present petitioner borrowed Rs. 1,00,000/-
from him and on 8.2.2011, the petitioner
handed over two cheques bearing no.
850213 & 850214 dated 9.4.2011 and
15.4.2011, respectively. Cheques were
presented before the Bank but the same
were dishonoured due to insufficient
amount in the account. ON 18.10.2011,
respondent no. 2 sent a notice to the
petitioner and same was served but all in
vain. On 8.11.2011, respondent no. 2 filed a
complaint case no. 1500 of 2011 (Nepal
Singh Vs. Dhirendra Singh) under section
138 of Negotiable Instruments Act, 1881
against the petitioner in the court. Trial
court vide its order dated 28.3.2012 has
taken cognizance and summoned the
petitioner.

3. Learned counsel for the petitioner
submitted that complainant / respondent is
wholly
incompetent
to
lodge
the
prosecution as cheques were issued by the
firm M/s Rashmi Arosole & Chemicals and
petitioner is proprietor of this firm but the
firm is not arraign as an accused. Reliance
has been placed on section 138 of
Negotiable
Instruments
Act,
1881
(Hereinafter referred as N.I. Act) i.e. read
as under:-

Section 138 in The Negotiable
Instruments Act, 1881

"18 [ 138 Dishonour of cheque
for insufficiency, etc., of funds in the
account. --Where any cheque drawn by a
person on an account maintained by him
with a banker for payment of any amount of
money to another person from out of that
account for the discharge, in whole or in
part, of any debt or other liability, is
returned by the bank unpaid, either because
of the amount of money standing to the
credit of that account is insufficient to
honour the cheque or that it exceeds the
amount arranged to be paid from that
account by an agreement made with that
bank, such person shall be deemed to have
committed an offence and shall, without
prejudice to any other provisions of this
Act, be punished with imprisonment for 19
[a term which may be extended to two
years], or with fine which may extend to
twice the amount of the cheque, or with
both: Provided that nothing contained in
this section shall apply unless--

(a) the cheque has been presented
to the bank within a period of six months
from the date on which it is drawn or
within the period of its validity, whichever
is earlier;

(b) the payee or the holder in due
course of the cheque, as the case may be,
makes a demand for the payment of the
said amount of money by giving a notice in
writing, to the drawer of the cheque,
20[within thirty days] of the receipt of
11 All. Dhirendra Singh Vs. State of U.P. & Anr.
217
information
by
him
from
the
bank
regarding the return of the cheque as
unpaid; and

(c) the drawer of such cheque
fails to make the payment of the said
amount of money to the payee or, as the
case may be, to the holder in due course of
the cheque, within fifteen days of the
receipt of the said notice."

4. It is further submitted that cheques
issued by proprietorship firm after referring
to Section 141 of the N.I. Act in relying the
decision of the Hon'ble Supreme Court in
the case of Aneeta Hada Vs. M/s
Godfather Travels & Tours Pvt. Ltd. In
this case Hon'ble Supreme Court has
clearly held that if the cheques were issued
by the firm or company, the firm / company
must be arraign as an accused. So learned
counsel for the petitioner submitted that
until and unless company or firm is arraign
as an accused director or the other officer
of the company / firm cannot be prosecuted
/
punished
in
the
complaint.
The
submission raised by learned counsel for
the petitioner that proceeding of complaint
is wholly illegal, hence petition is liable to
be allowed on this sole ground.

5. Learned counsel for the petitioner
also relied upon the judgment of this court
in Devendra Kumar Garg Vs. State of U.P.
and Another for maintaining prosecution in
which it was held that for maintaining
prosecution under section 141 of N.I. Act
as above for arraining the company as an
accused. Company was not arraign as a
party in the notice or in complaint so
cognizance order is liable to be quashed.

6. Dr. S.B. Maurya, the learned
A.G.A. vehemently opposed the prayer and
submits that cheques drawn by the
petitioner in his personal capacity. It is
further submitted that cheques were given
by petitioner by way of security for
payment
of
money.
So
in
these
circumstances, no need to arraign the firm
as a party.

7. I have heard learned counsel for the
petitioner, Dr. S.B. Maurya, the learned
A.G.A. and perused the material available
on record.

8. Perusal of cheques shows that it is
drawn by the petitioner and petitioner
admitted that impugned cheques bearing
his signature. It is also not disputed that the
petitioner is proprietor of the firm M/s M/s
Rashmi Arosole
& Chemicals,
main
contention of the petitioner is that the
prosecution could not launch unless and
until the firm arraign as accused.

The provision of Section 141 in
The Negotiable Instruments Act, 1881
read as under:-

21 [ 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: 22 [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
218 INDIAN LAW REPORTS ALLAHABAD SERIES
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.]"

9. A plain reading of the provision
makes it clear, if the person committing the
offence is a "company", in that event every
natural
person
responsible
for
such
commission as also the artificial person
namely the company shall be deemed to be
guilty of the offence and be liable to be
proceeded
against
and
punished
accordingly. Also, certain other natural
persons may be held guilty, if so proved.

10. Perusal of the registration of firm,
Annexure no. 1, it transpires that the
petitioner is the proprietor of the firm
namely M/S Rashmi Arosole & Chemical
Avas Vikas Colony, Sector 10, Sikandara
Agra. Perusal of registration certificate of
firm, petitioner Dhirendra Singh, is the
proprietor of the firm and it is clear that this
is the sole proprietorship firm. Thus, the
main question arises whether in sole
proprietorship firm indictment of firm
arraign as parties is necessary or not.

11. Thus, the phrase "association of
individuals"
necessarily
requires
such
entity to be constituted by two or more
individuals i.e. natural persons. On the
contrary a sole-proprietorship concern, by
very description does not allow for
ownership to be shared or be joint and it
defines, restricts and dictates the ownership
to remain with one person only. Thus,
"associations of individuals" are absolutely
opposed to sole-proprietorship concerns, in
that sense and aspect.

12. A 'partnership' on the other hand is
a relationship formed between persons who
willfully form such relationship with each
other. Individually, in the context of that
relationship, they are called 'partners' and
collectively, they are called the 'firm', while
the name in which they set up and conduct
their
business/activity
(under
such
relationship), is called their 'firm name'.

13. While a partnership results in the
collective identity of a firm coming into
existence, a proprietorship is nothing more
than a cloak or a trade name acquired by an
individual or a person for the purpose of
conducting a particular activity. With or
without
such
trade
name,
it
(sole
proprietary concern) remains identified to
the individual who owns it. It does not
bring to life any new or other legal identity
or entity. No rights or liabilities arise or are
incurred, by any person (whether natural or
artificial), except that otherwise attach to
the natural person who owns it. Thus it is
only a 'concern' of the individual who owns
it. The trade name remains the shadow of
the natural person or a mere projection or
11 All. Meva Lal Vs. State of U.P. & Ors.
219
an identity that springs from and vanishes
with the individual. It has no independent
existence or continuity.

14. In the context of an offence under
section 138 of the Act, by virtue of
Explanation (b) to section 141 of the Act,
only a partner of a 'firm' has been
artificially equated to a 'director' of a
'company'. Its a legal fiction created in a
penal statute. It must be confined to the
limited to the purpose for which it has been
created. Thus a partner of a 'firm' entails the
same vicarious liability towards his 'firm' as
'director' does towards his 'company',
though a partnership is not an artificial
person. So also, upon being thus equated,
the partnership 'firm' and its partner/s
has/have to be impleaded as an accused
person in any criminal complaint, that may
be filed alleging offence committed by the
firm. However, there is no indication in the
statute to stretch that legal fiction to a sole
proprietary concern.

15. Besides, in the case of a sole
proprietary concern, there are no two
persons
in
existence.
Therefore,
no
vicarious liability may ever arise on any
other person. The identity of the sole
proprietor and that of his 'concern' remain
one, even though the sole proprietor may
adopt a trade name different from his own,
for such 'concern'. Thus, even otherwise,
conceptually, the principle contained in
section 141 of the Act is not applicable to a
sole-proprietary concern.

16. Accordingly, there is no defect in
the complaint lodged against the applicant,
in his capacity as the sole proprietor of the
concern M/s Rashmi Arosole & Chemicals.
There was no requirement to implead his
sole proprietary concern as an accused
person nor there was any need to
additionally implead the applicant by his
trade name.

17. On perusal of the averment of the
parties, it is crystal clear that petitioner
taken the money in advance by way of loan
and petitioner handed over the cheques
bearing no. 850213 & 850214 amount of
Rs. 50,000/- each only for the security for
payment of money advance by way of loan.
So the transaction of money and cheques
not in the prosecution of business of firm
but cheques handed over by petitioner to
Nepal Singh in individual capacity. So due
to aforesaid reason too no need to implead
the sole proprietor firm by his firm name.

18. So the reason aforesaid, there is
no illegality or irregularity in the orders
dated 31.10.2018 passed by Additional
Court No. 3, Agra and the order dated
6.2.2020 passed by Additional Sessions
Judge, Court No. 17, Agra against the
petitioner, hence no interference warranted.

19. The petition lacks merit and is,
accordingly, dismissed.
----------
(2020)11ILR A219
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.11.2020

BEFORE

THE HON'BLE J.J. MUNIR, J.

Matters Under Article 227 No. 4533 of 2019
(Criminal)

Meva Lal ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Rajesh Kumar Srivastava, Sri Jai
Prakash Rao