Section 138 complaint by unregistered firm survives; process upheld on affidavit evidence, but unsupported accused is dropped.

A complaint under Section 138 of the Negotiable Instruments Act is not barred merely because the complainant is an unregistered partnership firm; the earlier Division Bench view was treated as governing, and the revisional court's contrary view was rejected. In a Section 138 complaint, where the accused resides outside the Magistrate's territorial jurisdiction, process was upheld because the Magistrate examined the complainant on oath, considered the complaint, affidavit and supporting documents, and was satisfied that sufficient grounds existed to proceed; the order was not mechanical. Process against an accused not shown to be a partner or cheque signatory was quashed for want of material connecting her to the transaction.

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Issues: (i) whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed by an unregistered partnership firm is barred by Section 69(2) of the Indian Partnership Act, 1932; (ii) whether, when the accused resides outside the territorial jurisdiction of the Magistrate, non-postponement of process without a separate inquiry under Section 202 of the Code of Criminal Procedure, 1973 vitiates the issuance of process; and (iii) whether process could be sustained against an accused who was not shown to be a partner or signatory of the cheque.

Issue (i): whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed by an unregistered partnership firm is barred by Section 69(2) of the Indian Partnership Act, 1932.

Analysis: The earlier Division Bench view holding that prosecution under Section 138 is not hit by the bar under Section 69(2) was treated as the governing position. The contrary view taken by the revisional court was held to be incorrect.

Conclusion: The complaint was not barred on the ground that the firm was unregistered.

Issue (ii): whether, when the accused resides outside the territorial jurisdiction of the Magistrate, non-postponement of process without a separate inquiry under Section 202 of the Code of Criminal Procedure, 1973 vitiates the issuance of process.

Analysis: The order issuing process showed that the Magistrate had examined the complainant on oath, perused the complaint and supporting documents, and formed satisfaction that sufficient grounds existed for proceeding. In complaints under Section 138 of the Negotiable Instruments Act, 1881, the material on record and the affidavit framework under Section 145 can support such satisfaction, and the process order was not shown to be mechanical.

Conclusion: The revisional finding that process was vitiated for want of inquiry under Section 202 was rejected, and the issuance of process was upheld.

Issue (iii): whether process could be sustained against an accused who was not shown to be a partner or signatory of the cheque.

Analysis: The statement that the concerned accused was neither a partner nor responsible for the transaction was accepted, and the material did not justify continuation of process against her.

Conclusion: The process against that accused was quashed.

Final Conclusion: The revisional order setting aside the process was quashed, the original process order was restored in substance, and the application succeeded with limited relief in respect of one accused and costs.

Ratio Decidendi: A complaint under Section 138 of the Negotiable Instruments Act, 1881 is not barred merely because the complainant is an unregistered partnership firm, and in such complaints the Magistrate may form the requisite satisfaction for issuance of process on the basis of the complaint, affidavit and supporting material even where the accused resides outside jurisdiction.

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