Sole proprietorship liability under cheque law upheld; statutory presumptions remained unrebutted and acquittal was reversed.

A complaint under the Negotiable Instruments Act against a sole proprietor was maintainable even if the proprietorship concern was not impleaded separately, because a proprietorship is not a distinct juristic person and Section 141 does not apply to it. On the merits, the cheque, signature and dishonour were undisputed, and the complainant's financial capacity was supported by salary proof and bank entries. The defence that the cheque was stolen and misused was not proved by credible evidence, so the statutory presumptions under Sections 118 and 139 remained unrebutted. The appellate acquittal was therefore held unsustainable, and the trial court's conviction and sentence were restored.

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Issues: (i) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable against the proprietor without impleading the proprietorship concern as a separate accused. (ii) Whether the acquittal recorded by the first appellate court was illegal, perverse and liable to be interfered with.

Issue (i): Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable against the proprietor without impleading the proprietorship concern as a separate accused.

Analysis: A proprietorship concern is not a juristic entity distinct from its proprietor. The business name is only the mode in which the proprietor carries on business, and Section 141 of the Negotiable Instruments Act, 1881, which deals with vicarious liability in relation to companies and firms, does not apply to a sole proprietorship. A complaint can therefore be instituted either in the name of the proprietor or in the name of the proprietary concern.

Conclusion: The complaint was maintainable against the proprietor, and the absence of the proprietorship concern as a separate accused did not vitiate the prosecution.

Issue (ii): Whether the acquittal recorded by the first appellate court was illegal, perverse and liable to be interfered with.

Analysis: The cheque, signature, and dishonour for insufficiency of funds were not in dispute. The complainant produced evidence of financial capacity, including salary proof and bank entries, sufficient to show ability to advance the loan. The defence that the cheque was stolen by an employee and misused remained unsubstantiated by credible documentary or oral evidence. In such circumstances, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881 operated in favour of the complainant and were not rebutted on a preponderance of probabilities. The first appellate court had reversed the conviction on an erroneous appreciation of evidence.

Conclusion: The acquittal was unsustainable and was set aside; the conviction recorded by the trial court was restored.

Final Conclusion: The appeal succeeded, the acquittal was overturned, and the conviction and sentence imposed by the trial court stood confirmed.

Ratio Decidendi: A sole proprietorship is not separate from its proprietor for the purpose of prosecution under Section 138 of the Negotiable Instruments Act, 1881, and an acquittal may be reversed where the statutory presumptions are not rebutted and the defence remains unproved.

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