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2022 (1) TMI 752 - HC - Indian LawsDishonor of Cheque - initiation of proceedings under Section 138 of the N.I. Act against petitioner, without joining the Partnership Firm - whether partnership firm has to be made a party to the proceedings, in view the provisions of Section 141 of the Act? - HELD THAT:- Undisputed facts are that the cheques were issued by the partnership firm, the present petitioner is the signatory to the cheque as an authorized partner and the transaction of purchase of land was for the firm. Section 141 of the N.I. Act provides for the constructive liability on the person responsible for the conduct of the business of the company or partnership firm. Section 141 describes about the offences by the Company. The explanation to Section 141 giving the meaning to ‘Company’ means any body corporate and includes a firm or other association of individuals, further “director”, in relation to a firm, means a partner in the firm. The petitioner is before this Court challenging the proceedings against him under Section 138 of the N.I. Act contending that the firm has not been joined in the criminal proceedings. The deeming provision under Section 141 of the Act applies to the Company and person responsible for the acts of the Company. Section 141 clarifies that the company would mean any body corporate and would include a firm and "directors", in relation to firm, would also means a partners in the firm. Section 141 clearly stipulates that the person which is a Company commits offence then certain categories of person as provided therein, as well as the Company would be deemed to be liable for the offences under Section 138 of the N.I. Act. Explanation to Section 141 thus makes deeming fiction applicable in the case of partnership firm too, which gets included in the meaning of the Company for the purpose of Section 141 of the N.I. Act. The effect of the Section 141 is that Company is principal offender under Section 138 of the Act and remaining persons are made offender by virtue of legal fiction created by the legislature as per the Section. Thus actual offence should have been committed by the Company then alone the other categories of persons would become liable for the offences - in the present case though the name of the firm has been reflected in the cause title showing petitioner as partner of the firm, but the firm has not been separately, in individual capacity, made a party to the proceedings. The petitioner has been joined as a partner to the firm without impleading the firm in the criminal proceedings, which is not tenable. The petition deserves to be allowed and stands allowed.
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