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Supreme Court: Company Includes Partnership Firm or Other Association of Individual

Author- Neha Agarwal (Banasthali Vidyapith, Rajasthan)

Supreme Court on 27th May 2019 in the case of G. Ramesh v. Janine Harish Kumar Ujwal has observed that the expression “ Company” under section 141 of the Negotiable Instrument Act, 1881 includes a partnership firm or association of persons.

In the instant case, the first accused was a partnership firm named as Vainqueur Corporate Services which deals with data entry work and other accused were partners in the firm. The High Court quashed the complaint of appellant against one of the accused( partners) on the ground that averments contained in paragraph 5 of the complaint were not sufficient to implicate criminal liability upon the accused for an offence which is punishable under section 138 of  Negotiable Instrument Act, 1881.

Disagreeing with the judgement of High Court appellant filed appeal before the court. Ms. Bhabhan Das, learned counsel on behalf of the appellant submitted that the High Court had manifestly made error in quashing the complaint and averments contained in complaint is sufficient to meet the requirements as mentioned in section 141 of Negotiable Instrument Act, 1881.

Mr. Abhimanyu Bhandari, learner counsel on behalf of the respondent submitted that there was no averment in the complaint The first respondent was incharge of and was responsible for the conduct of company business.

The bench comprising of Justice DY Chandrachud and Justice Hemant Gupta, after taking into consideration of all the arguments made by both the parties and material upon by the parties observed:

It is evident from the relevant paragraphs of the complaint which have been extracted above that the complaint contains a sufficient description of (i) the nature of the partnership; (ii) the business which was being carried on; (iii) the role of each of the accused in the conduct of the business and, specifically, in relation to the transactions which took place with the complainant. At every place in the averments, the accused have been referred to in the plural sense. Besides this, the specific role of each of them in relation to the transactions arising out of the contract in question, which ultimately led to the dishonour of the cheques, has been elucidated.

The bench further held that the High Court proceeded on the basis that the first accused was a company in which the other two accused were directors. The bench said: “Section 141 undoubtedly uses the expression “company” so as to include a firm or association of persons. The fact that the first accused, in the present case, is a partnership firm of which the remaining two accused are partners has been missed by the High Court.”

Hence, the appeal is allowed and Supreme Court set aside the impugned judgement and order of the High court dated 13-06-2018.

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