Supreme Court:Company includes Partnership Firm or Association of Individuals under Section 141 of Negotiable Instruments Act

May 10, 2019
Negotiable Instruments Act

The Supreme Court has observed in the case of G. Ramesh v. Janine Harish Kumar Ujwal[1] that the term ‘company’ includes a partnership firm or association of individuals under Section 141 of the Negotiable Instruments Act, 1881.

In the present case, the primary accused was a partnership firm named Vainqueur Corporate Services that was engaged in data entry work and the other accused were partners of the partnership firm (hereinafter referred to as the ‘Respondents’). The appeal in the Supreme Court was filed by G. Ramesh (hereinafter referred to as the ‘Appellant’) against the Hon’ble Hyderabad High Court’s decision to quash the complaint of the Appellant against the Respondents on the ground that the allegations contained in the complaint were not sufficient to establish criminal liability on the accused for an offence which is punishable under Section 138 of Negotiable Instruments Act.

As per Section 141 of the Negotiable Instruments Act, the expression ‘company’ is defined as any body corporate which includes a firm or other association. Further, sub-Section (1) of Section 141 of the Negotiable Instruments Act provides that where an offence is committed under Section 138 of the Negotiable Instruments Act by a company, such company as well as all the persons who at the time of the commission of the offence were in-charge and were responsible for the conduct of the company, shall be guilty of such an offence.

After considering all the arguments from both the sides, the Apex Court observed that the complaint contains sufficient description of

  • the nature of the partnership;
  • the business which was being carried on;
  • the role of each of the accused in the conduct of the business and, specifically, in relation to the transactions which took place with the complainant.

The Supreme Court concluded that “Section 141 undoubtedly uses the expression “company” so as to include a firm or association of persons. The fact that the first accused, in the present case, is a partnership firm of which the remaining two accused are partners has been missed by the High Court.”

[1] Criminal Appeal No. 603 OF 2019.

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