Section 138 of the Negotiable Instruments Act - Cheque was issued by and on behalf of the firm - Notice issued about the dishonor of cheque - after completion of Trial - pending the case A2 died on 2-12-2006 - Trail court dismissed the complaint against the A1 firm and A2 as abated and after hearing the A 3 and A4 dismissed the case on merits - Whether Firm A1 too abated when it was represented by A3 and A4 other partners ? for the purpose of imposing fine of double the amount, the death of A2 does not abate the firm as other partners can continue the firm on the death of one of the partner as per law - Remanded the matter to decide the case on the point whether the firm dissolved or not with reference to the D-1 partnership deed already exhibited, from death of A-2 one of the partners and if not dissolved for nothing to abate to decide the liability of A-1 firm though not A-3 representing A-1 firm personally liable, to the liability of imposing fine against the firm in the event of the debt is proved legally enforceable - 2015 A.P.msklawreports



the Complainant is a merchant and doing
cotton business, A-1 is cotton merchant, A-2 to A-4 are its partners .                                                      they used to purchase cotton from several persons like complainant on credi
from 12.06.1998 onwards accused are
maintaining khata with the complainant in the course of their
business, that the said Khata is running and mutual
As per the khata
the accused has to pay an amount of Rs.4,89,655/- to the
complainant as on 05.12.2000 and the complainant demanded the   
accused several times to pay the said amount, that the accused gave
cheque for Rs.4,76,552/- and the same was when presented returned 
dishonoured.  
The complainant issued a statutory legal notice and the
accused got issued reply and did not pay the amount, for which the
complainant presented the complaint.

The trial Court recorded that the case against

Accused Nos.1 and 2 was abated on 05.12.2006, for death of A-2 who 
was representing A-1 firm and after hearing both sides and after
perusal of material and evidence on record, the trial Court held the
other two partners of the firm A-3 and A-4 not guilty for the offence
punishable under Section 138 of the Negotiable Instruments Act and
accordingly they were acquitted for said offence.
High court held that 
Thus, the trial Court ought not to have recorded the
proceedings against A-1 firm as abated, but for recording A-3 being
one of the partners on record to represent A-1 firm and once, A-1
firm is there on record, though not liable for imprisonment of A-3
representing A-1 firm, fine can be imposed to recover for not
exceeding double the value of the cheque amount. 
In particular for,
either from P.W-1 cross-examination or from D.W-1 evidence with
reference to Exs.P-1, P-4, P-9 and P-10, there is not much in dispute
of Ex.P-1 cheque issued by the firm duly signed by A-2 as its
authorised partner to make the firm responsible for the dishonor as
firm was also served with notice under Ex.P-4 acknowledged by A-2 in
his individual capacity also under Ex.P-5 and P-6 apart from A-3 and
A-4 under Exs.P-7 and P-8 acknowledgements referred supra.  
To that
extent as act of Court shall prejudice no man not sanctioned by law,
the matter requires remittance for re-trial to decide fresh, the
liability of A-1 entity by setting aside the trial Courts observation of
the prosecution against A-1 is abated from death of A-2 for still A-3
partner of A-1 firm continuous on record though as observed by the
trial Court and uphold by this Court, A-3 personally not made liable
equally A-4; A-1 if at all to be made liable being a firm to represent
by other partners for the reason of A-3 as partner of the firm on
record to represent A-1.  

   In the result, while upholding the trial Courts acquittal
judgment of A-3 and A-4, however by setting aside the recording of
abatement of the prosecution against A-1 firm by remitting the
matter to the trial Court for re-trial in directing to decide afresh by
arraying A-3 as representing A-1 firm as one of the partners for
continuation of the prosecution of A-1 firm to decide whether the
firm dissolved or not with reference to the D-1 partnership deed
already exhibited, from death of A-2 one of the partners and if not
dissolved for nothing to abate to decide the liability of A-1 firm
though not A-3 representing A-1 firm personally liable, to the liability
of imposing fine against the firm in the event of the debt is proved
legally enforceable.2015 A.P.msklawreports

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