# Naththu Singh v. State of U.P. & Anr - **Citation:** (2019) 3 ILRA 108 - **Court:** High Court of Judicature at Allahabad - **Decided:** 2019-05-13 - **Case number:** Criminal Misc. Application No.14361 of 2004 - **Bench:** Sudhir Agarwal - **Source:** https://unisonlegal.in/judgment/allahabad-high-court/naththu-singh-v-state-of-u-p-anr-44630 - **Pages:** 3 ## Headnote Law -The Negotiable Instruments Act, 1881 - Section 138 - Debt - Cheque issued by one partner of a partnership firm, by and on behalf of the Firm, towards the share/profit of the partnership firm to another partner - is not a debt on any of the partner against another partner. Liability of partners is co-extensive along with that Firm and is a legal liability- Partners of a Firm qua share of profit in the Firm business do not stand in the capacity of creditor and debtor but being Owners of the Firm are jointly and severally liable. Term 'Liability' not attracted in respect to money or amount, which is claimed to be the share in profit of a partner- For dispute arising out of distribution of share, remedy lies to the partner to file suit for accounting in common law, but Section 138 of N. I. Act would not be attracted. (Para 5,7,8 & 9) Application u/s 482 Cr.P.C allowed (E-3) List of Cases cited: - ## Text 108 INDIAN LAW REPORTS ALLAHABAD SERIES to part with the sale consideration. But in this case the complaint is not by the purchaser. On the other hand, the purchaser is made a co-accused i.e. applicants. 19. It is not the case of the complainant that any of the accused tried to deceive him either by making a false or misleading representation or by any other action or omission, nor is it his case that they offered him any fraudulent or dishonest inducement to deliver any property or to consent to the retention thereof by any person or to intentionally induce him to do or omit to do anything which he would not do or omit if he were not so deceived. Nor did the complainant allege that the first appellant pretended to be the complainant while executing the sale deeds. Therefore, it cannot be said that the non-applicant by the act of executing sale deeds in favour of the second accused or the second accused by reason of being the purchaser, or the third, fourth and fifth accused, by reason of being the witness, scribe and stamp vendor in regard to the sale deeds, deceived the complainant in any manner. 20. As the ingredients of cheating as stated in section 415 are not found, it cannot be said that there was an offence punishable under sections 417, 418, 419 or 420 of the Code. A clarification 21. When it is stated that execution of a sale deed by a person, purporting to convey a property which is not his, as his property, is not making a false document and therefore not forgery, it should not be understood as holding that such an act can never be a criminal offence. If a person sells a property knowing that it does not belong to him, and thereby defrauds the person who purchased the property, the person defrauded, that is the purchaser, may complain that the vendor committed the fraudulent act of cheating. But a third party who is not the purchaser under the deed may not be able to make such complaint. 22. In the light of aforesaid, the averments made in the complaint if assumed to be true do not make any offence under Section 419, 420, 468, 471 I.P.C. and, therefore, the continuance of the proceedings arising out of the impugned complaint is nothing but an abuse of process of court and, thus, in the exercise of inherent power, I deem it fit to quash the impugned complaint and the summoning order. 23. Considering the overall facts and circumstances of the case and taking the entire allegations made in the complaint and in the statements recorded under Sections 200 and 202 Cr.P.C., this Court is satisfied that, prima facie, commission of cognizable offence is not made out against the applicants and non-applicant, Shiv Kumar and his wife Smt. Kamla Devi. 24 . Accordingly, the complaint and the proceedings arising therefrom including the summoning order are hereby quashed. The present application under Section 482 Cr.P.C. is, accordingly, allowed. ---------- (2019)11ILR A108 ORIGINAL JURISDICTION CRIMINAL SIDE 3 All. Naththu Singh Vs. State of U.P. & Anr. 109 DATED: ALLAHABAD 13.05.2019 BEFORE THE HON'BLE SUDHIR AGARWAL , J. Criminal Misc. Application No.14361 of 2004 u/s 482 Cr.P.C. Naththu Singh. ...Applicant Versus State of U.P. & Anr ...Opposite Parties Counsel for the Applicant: Sri S.P. Singh, Sri Vikrant Rana. Counsel for the Opposite Parties: A.G.A., Sri Anoop Trivedi, Sri Vibhu Rai. A. Criminal Law -The Negotiable Instruments Act, 1881 - Section 138 - Debt - Cheque issued by one partner of a partnership firm, by and on behalf of the Firm, towards the share/profit of the partnership firm to another partner - is not a debt on any of the partner against another partner. Liability of partners is co-extensive along with that Firm and is a legal liability- Partners of a Firm qua share of profit in the Firm business do not stand in the capacity of creditor and debtor but being Owners of the Firm are jointly and severally liable. Term 'Liability' not attracted in respect to money or amount, which is claimed to be the share in profit of a partner- For dispute arising out of distribution of share, remedy lies to the partner to file suit for accounting in common law, but Section 138 of N. I. Act would not be attracted. (Para 5,7,8 & 9) Application u/s 482 Cr.P.C allowed (E-3) List of Cases cited: - 1. Aneeta Hada Vs Godfather Travels & Tours Pvt. Ltd, (2012) 5 Supreme Court Cases 661 2. Himanshu Vs B. Shivamurthy & anr., (2019) 3 Supreme Court Cases 797. (Delivered by Hon'ble Sudhir Agarwal, J. ) 1. Heard Sri Vikrant Rana, learned counsel for applicant, learned A.G.A. for State and Sri Vibhu Rai, Advocate holding brief of Sri Anoop Trivedi, learned counsel for respondent-2. 2. This application under Section 482 Cr.P.C. has been filed praying for quashing of proceedings of complaint under Section 138 of The Negotiable Instruments Act, 1881 (hereinafter referred to as "N.I.Act") in Case No.246 of 2004 pending in the Court of Judicial Magistrate, Mawana, Meerut (Rajveer Singh vs. Naththu Singh). 3. It is submitted that cheque in question was issued by Firm, signed by authorized signatories i.e. three partners but complaint has been made without impleading the Firm and, therefore, it was not maintainable. In this regard reliance has been placed on Supreme Court's decision in Aneeta Hada Vs. Godfather Travels and Tours Private Limited, (2012) 5 Supreme Court Cases 661 and in Himanshu Vs B. Shivamurthy and Another, (2019) 3 Supreme Court Cases 797. 4. When questioned learned A.G.A. as well as learned counsel appearing for respondent 2 could not dispute aforesaid expositions of law. 5. From record it is evident that though cheque has been sent by partners of Firm, but it is by the Firm and on behalf of Firm i.e. M/S Nathu Singh and Others. This is evident from page 19 of paper book. So far as liability is concerned, in the matter of Firm, liability of partners is co-extensive. It is also of 110 INDIAN LAW REPORTS ALLAHABAD SERIES that Firm registered with Registrar of Firms and Societies and is a legal liability. Copy of partnership is on record and it shows that there were seven partners namely Sri Nathu Singh s/o Sri Shiv Charan Singh, Sri Lov Kush s/o Sri Rajbir Singh, Sri Jugberr s/o Sri yadram, Sri Arun Kumar s/o Sri Anand Pal Singh, Sri Arvind Kumar s/o Sri Rohtash Singh, Sri Rajbeer Singh s/o Sri Yadram Singh and Sri Rajbeer Singh s/o Sri Bhopal Singh. 6. As per averments in para 5 of complaint, the Firm was practically being run by Nathu Singh. In February 2004 all the partners decided to separate whereupon accused-applicant assured that share of partners in total profit shall be given to them and in respect thereto Cheque No.965804 for Rs.3,10,000/- dated 20.02.2004 was issued. 7. On above averment, it is evident that it is the share/profit of one of partner in the Firm for which cheque was issued by another partner. Section 138 of N.I. Act will apply only when cheque is issued for payment of any amount of money to another person for discharging of any debt or other liability. Profit or share in a Partnership Firm is not a debt on any of the partner against another partner. In common parlance, a debt is something owed to another and liability is an obligation, a chosen action which is capable of being assigned by creditor to some other person. 8. Here two partners of a Firm qua share of profit in the Firm business, do not stand in the capacity of creditor and debtor. Both are in capacity of Owners of the Firm and being Owners of the Firm, partners are also jointly and severally liable. If for distribution of share, there is some dispute, under the provisions of The Partnership Act, 1932 (hereinafter referred to as "Act, 1932"), remedy lies to the partner to file suit for accounting in common law, but to bring it within the term of any debt or liability attracting Section 138 of N. I. Act, in my view is clearly erroneous. Here one partner do not owe anything to another partner. All the partners have their specified shares in the Firm and if there is any dispute with regard to receipt of such share between partners, the same can be settled by initiating proceeding of accounting, but not by taking recourse to Section 138 of N.I. Act. 9. Similarly, to attract the term 'liability', it is difficult to hold that one partner owes liability to another partner in respect to money or amount, which is claimed to be the share in profit, since, profit is earned by Firm and all the partners having similar and equal status in the Firm, it can be distributed amongst themselves as per their consent or taking remedy in common law, but Section 138 of N. I. Act would not be attracted, hence, proceedings under Section 138 N. I. Act, are wholly without jurisdiction. 10. In view thereof, application is allowed. The proceedings of Case No.246 of 2004, under Section 138 of N.I. Act, pending in the Court of Judicial Magistrate, Mawana, Meerut (Rajveer Singh vs. Naththu Singh) is hereby quashed. ---------- (2019)11ILR A110 ORIGINAL JURISDICTION CRIMINAL SIDE DATED: ALLAHABAD 30.05.2019 BEFORE THE HON'BLE SAUMITRA DAYAL SINGH , J.