https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=384476 https://www.taxtmi.com/caselaws?id=384476 Dishonor of Cheque - trust - Prosecution proceedings against the trustee who has not signed the cheque - petitioner argued that since trust is not an association of individuals , no successful prosecution against the petitioners, invoking the provisions under section 141 of the N. I. Act, can be sustained - HELD THAT:- All the trustees are the owners of the property, but they are obliged to use the same in a particular manner. If a number of trustees exist, they are the joint owners of the property. The trustees are bound to maintain and defend all suits, for the preservation of the trust-property and the assertion or protection of the title thereto. Thus it appears that the trust is not capable of suing and being sued in a court of law, even though the trustees can maintain and defend suits for the preservation and protection of the trust-property. Therefore, a trust is not a juristic person or a legal entity, as the juristic person has a legal existence of its own and hence it is capable of suing and being sued in a court of law. Thus it appears that a trust is not like a body corporate, which has a legal existence of its own and therefore can appoint an agent - thus trust is not a body corporate. Whether the trust is an association of individuals or not? - HELD THAT:- A mere combination of persons or coming together of persons, without any intention to have a joint venture or carry on some common activity with a common understanding and purpose to achieve some common benefit, would not convert two or more persons into a body of individuals/association of persons - it is clear from section 3 of the Act that the trustees do not get any benefit out of the trust-property and the benefit will be obtained individually by the beneficiaries or the beneficiaries and the author of the trust. Therefore, it cannot be said that the trustees are persons join together for a common action to achieve some common benefit. It is true that the beneficiaries get the benefit. However, the beneficiaries do not become the beneficiaries by their own volition. Since the common purpose of the trust is not to achieve benefit to the trustees, the trust cannot be said to be an association of persons/body of individuals . The trust is not a body corporate or an association of individuals as provided in the Explanation to section 141 of the N. I. Act. Therefore, no prosecution against the trustees, invoking the provisions under section 141 of the N. I. Act, can be maintained. Consequently, no successful prosecution against the petitioners, invoking the provisions of section 141 of the N. I. Act, can be sustained. Since the petitioners did not sign the cheque, no successful prosecution against the petitioners under section 138 of the N. I. Act can be sustained and consequently, no purpose will be served even if the prosecution against the petitioners is permitted to be continued - In the said circumstances, I am inclined to quash the complaint and further proceedings against the petitioners in the above said case, invoking the inherent power under section 482 of the Cr.P.C., to secure the ends of justice. Application allowed. Case-Laws Indian Laws Wed, 06 Feb 2019 00:00:00 +0530