Final Order 7

Order Details: COPY OF ORDER
Pdf Text: CC NO.8247/2025
Mukesh Gupta Vs. VED PARKASH MITTAL AND SONS
29.11.2025
ORDER
1. Vide this order, I shall decide upon the maintainability of the present complaint at the
stage of pre-cognizance.
2. Ld. Counsel for the proposed accused placed reliance upon the recent judgment of the
Hon’ble SC in
Dhanasingh Prabhu v. Chandrasekar and another1. In terms of the
judgment, he submitted that, the complainant has only arraigned the ‘partnership
firm’ as an accused. The partners of the firm have not been impleaded as accused
thereof.
2.1 The legal demand notice has been addressed to the partnership firm without
its partners thereof.
2.2 Even if the complainant were to amend its complaint, he will be unable to
cure the defect in the legal demand notice.
2.3 Since the liability in a case under Section 138 of the NI Act emanates
against the partners who are ‘jointly and severally liable’ for the offence, the
complaint cannot be said to be maintainable against the accused partnership firm
per se.
3. Ld. Counsel for the complainant submitted that this court does not have the locus to
hear the proposed accused at this stage. He placed reliance upon the judgment of the
Hon’ble SC in
Sanjabij Tari v. Kishore S. Borcar & Anr.2 in this regard.
3.1 He further submitted that the observations made by the Hon’ble SC are
merely an
obiter dicta and does not amount to a
ratio.
3.2 At the time of instituting the present case, the GST records of the
partnership firm did not reflect details of the partners thereof. The same has been
1 2025 INSC 831.
2 2025 SCC OnLine SC 2069.
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rectified suitably by moving an application for amendment of the complaint and
amended memo of parties.
3.3 Along with his submissions, Ld. Counsel has also moved an application for
suitably amending the complaint to arraign the partners of the firm as accused.
3.4 The Proposed accused partnership firm is the drawer of the cheque and in
terms of Section 7 of the NI Act, has been made arrayed as an accused.
4. Arguments heard. Record Perused.
LOCUS STANDI
5. Ld. Counsel for the proposed accused submitted that in terms of the judgment of the
Hon’ble SC in Sanjabij Tari3
, “there is no requirement to issue summons to the
accused in terms of Section 223 of BNSS i.e., at the pre-cognizance stage”.
6. The judgement of the Hon’ble SC had passed practice directions for the trial courts to
follow. However, the same is not apply retrospectively in cases, where notice has
already been issued to the proposed accused.
7. This court vide order dated 26.03.2025 had issued pre-cognizance notice under
Section 223 of BNSS to the proposed accused. This was prior in time to the judgment
of the Hon’ble SC in
Sanjabij Tari4.
8. Technical changes in law are to apply retrospectively. However, it is settled law that if
the change in law is such that it has the effect of affecting the rights of the accused, the
law is to apply prospectively.
9. In the instant matter, the right of hearing the accused at the stage of pre-cognizance is
in the nature of affecting his substantive rights. Accordingly, the judgment of the
Hon’ble SC cannot be stated to have retrospective operation in law, unless explicitly
stated to be so. Accordingly, this court has the requisite locus to hear the proposed
accused at the stage of pre-cognizance.
3
Supra 2.
4
Supra 2.
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OBSERVATIONS OF THE HON’BLE SC ARE MERELY OBITER DICTA
10. Heavy reliance has been placed by Ld. Counsel for the proposed accused upon the
observations made by the Hon’ble SC in the judgment of
Dhanasingh Prabhu5.
11. Ld. Counsel for the proposed accused submitted that, the observations made by the
Hon’ble SC amount to
obiter dicta as opposed to ratio decidendi, as the same does not
relate to the facts of the case in question.
12. However, it is not to say that the observations made by the Hon’ble Apex court upon a
provision of law do not bear persuasive value in deciding the complaint at hand.
LEGAL EFFECT OF ARRAYING PARTNERSHIP FIRM AS ACCUSED WITHOUT THE
PARTNERS
13. The Hon’ble Apex court in the judgment of
Dhanasingh Prabhu6 also placed reliance
upon its earlier judgment in
G. Ramesh v. Kanike Harish Kumar Ujwal7. Even though
the facts of G. Ramesh and Dhanasingh Prabhu do not bear resemblance with the case
at hand, this court is placing reliance upon the ‘principle of law’ interpreted by the
Apex court.
14. Upon a cumulative reading of the Indian Partnership Act, it can be deduced that
partners of a partnership firm are ‘jointly and severally liable’ for the acts of the firm.
The partnership firm has no independent juristic existence of its own without its
partners thereof. Neither are the partners ‘vicariously liable’ for the acts of the firm.
15. Reference may be had to Section 141(2) of the NI Act whereby vicarious liability is
appended to the directors of a company by way of deeming fiction. The Explanation
to Section 141 of the NI Act also includes a ‘firm’ within its domain.
16. The Hon’ble court in its judgment has clarified that even though the partnership firm
is included as an expansive category under the Explanation to Section 141 of the NI
5
Supra 1.
6
Supra 1.
7 (2020) 17 SCC 239.
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Act, jurisprudentially speaking, it is not the same as a company. The directors of a
company are vicariously liable for the acts of a company. However, the partners of a
partnership firm stricto sensu are ‘jointly and severally’ liable for their acts. A
partnership firm is not separate in law from its partners.
17. The court went on to elucidate that, if the complainant had proceeded only against the
partnership firm and not the partners it possibly could have been held that the
partnership firm in the absence of its partners is not a complete juristic entity which
can be recognised in law and therefore cannot be proceeded against.
18. The court further went on to note, “
It is necessary to reiterate that a partnership firm
in the absence of its partners cannot at all be considered to be a juristic entity in
law.
Therefore, a partnership firm, in the absence of the partners being arraigned as
accused would not serve the purpose of the case and would be contrary to law”8.
19. A perusal of the record would reveal that the legal demand notice was sent in the
instant case to the partnership firm only and not to any of the partners in the firm.
19.1 The complainant has also moved an application for amending the
complaint to the limited extent of arraying the partners as accused.
19.2 However, the fact remains that the legal demand notice has only
been addressed and sent to the partnership firm. It would have been a
different case, had the legal demand notice would have been addressed to
the partners along with the firm. A legal demand notice addressed and sent
to the partnership firm cannot be construed to be a notice to its partners
thereof.
20. An offence under section 138 of the NI Act is strictly a document based technical
offence and the ingredients are to be strictly fulfilled in order for the presumption in
law to arise.
21. In light of the observation made aforesaid, no prima facie case is made out against the
proposed accused firm at this stage as the complainant failed to arraign the partners of
the firm as accused thereof along with the firm. The same is an incurable defect.
8
Supra 1, Paragraph 6.9.
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22. Accordingly, the present complaint is dismissed as not being maintainable.
(Anjali Singh)
JMFC (NI Act) – 03/PHC/ND/29.11.2025
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