TaxTMI 
TaxTMI 
2026 (2) TMI 2
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....s of the case are that the complainant/ respondent and the accused persons/petitioners shared prior business relations, pursuant to which the petitioners herein had purchased jewellery articles from the complainant in June 2014, for a total value exceeding Rs.39 lakhs. It is alleged by the complainant that towards discharge of the said liability, the petitioner Manila Kundara had issued cheque no. 918605 for Rs.23,03,143/- whereas the petitioner Deepali Kundara had issued cheque no. 918642 for Rs.16,36,291/-, both dated 27.06.2014, drawn on ICICI Bank, Rohini Branch, in favour of the complainant, which upon presentation were dishonoured with the remarks "Payment Stopped by the Drawer." It is stated that despite service of a statutory legal notice upon the accused persons, calling upon them to discharge the outstanding liability within the prescribed period, no payment was made by them. Consequently, upon expiry of the stipulated period, the complainant was constrained to institute the present complaints under Section 138 of the NI Act. 4. The learned Metropolitan Magistrate-04, North District, Rohini Courts, Delhi [hereafter 'Trial Court'] convicted the petitioner Deepali Kundar....
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....he complainant's case, including the absence of proof regarding TIN number, audit records, stock registers, or any reliable business documents to substantiate the alleged jewellery transactions of such high value, and the reliance on vague and allegedly fabricated bills containing overwriting and lacking details or acknowledgment. It is also urged that the cheques were signed in blank and subsequently filled without the knowledge of the petitioners, amounting to material alteration, and that inconsistencies in the respondent's signatures further cast doubt on the genuineness of the documents. On these grounds, it is argued that the conviction suffers from grave illegality and perversity, and deserves to be set aside. 7. The learned counsel appearing for the respondent argues that the present petition is devoid of merit and is a re-agitation of issues already considered and rightly rejected by both the learned Trial Court and the learned Appellate Court. It is contended that the petitioner had purchased jewellery from the respondent on 06.06.2014 against a cash memo issued by Yashman Diamonds, and in view of the long-standing business relationship and familiarity with the petitio....
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....8 SCC 204; State of Gujarat v. Dilipsinh Kishorsinh Rao: 2023 SCC OnLine SC 1294]. 10. The principal contention raised by the petitioners before this Court relates to the locus standi of the complainant. It is urged that since the cheque in question was issued in the name of M/s Yashman Diamonds and not in the individual name of the respondent, the respondent lacked the authority to institute the complaint under Section 138 of the NI Act. 11. Upon a careful consideration of the record, this Court finds the said contention to be untenable and unmerited. From the pleadings, the statutory legal notice, as well as the testimony of the complainant, it has emerged that M/s Yashman Diamonds is a sole proprietorship concern and that the respondent-complainant is its proprietor. It is a settled principle of law that a sole proprietorship concern does not have a legal identity separate from that of its proprietor. Any transaction undertaken in the trade name of such concern is, in law, a transaction of the proprietor himself. 12. The complainant had clearly disclosed, even at the stage of issuance of the statutory legal notice, that he was the proprietor of M/s Yashman Diamonds. Thi....
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....y person who, at the time of offence was committed, was in-charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Company includes a partnership firm and any other association of individuals. The sole proprietorship firm would not fall within the meaning of partnership firm or association of individual. Vicarious liability cannot be fastened on the employees of a sole partnership firm, by taking aid of Section 141 of the Act, inasmuch as, no evidence has been led to show that the business was run by the respondent no. 2..." 16. In view of the above discussion, this Court finds that the objection regarding the complainant's locus standi was rightly rejected by the learned Trial Court. No perversity or legal infirmity is discernible in the findings returned on this aspect. The contention raised by the petitioners is accordingly rejected. 17. This Court further observes that the essential ingredients of Section 138 of the NI Act stand duly satisfied in the present case. The issuance of the cheque by the p....