The Himachal Pradesh High Court has clarified that a partner may file a complaint on behalf of a partnership firm under Section 138 of the Negotiable Instruments Act without producing written authorisation, if the partnership and the partner’s status are admitted by the accused under Section 313 CrPC. The court set aside the trial court’s technical acquittal and remitted the matter for adjudication on merits, reaffirming the principle that accused’s admissions under Section 313 CrPC can be considered in conjunction with the complainant’s evidence for determining maintainability. This judgment upholds and applies Supreme Court and Bombay High Court precedents and has binding value within the state’s subordinate courts.
Summary
| Category | Data |
|---|---|
| Case Name | CR.A/108/2014 of Ms GEE ESS TRADING CO. Vs PRABHA BHAGRA |
| CNR | HPHC010020312014 |
| Date of Registration | 10-04-2014 |
| Decision Date | 31-10-2025 |
| Disposal Nature | Allowed |
| Judgment Author | Hon’ble Mr. Justice Rakesh Kainthla |
| Court | High Court of Himachal Pradesh |
| Precedent Value | Binding on subordinate courts within Himachal Pradesh |
| Overrules / Affirms | Affirms Supreme Court precedents; distinguishes Shirgul Filling Station v. Kamal Sharma |
| Type of Law | Criminal, Negotiable Instruments Act, Partnership Law, Criminal Procedure Code |
| Questions of Law |
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| Ratio Decidendi |
The High Court held that, where the accused admits in their Section 313 CrPC statement that the complainant is a partner in the firm, and the partnership is unchallenged, the complaint cannot be dismissed on the technical ground of non-production of the written partnership deed or written authorisation. Section 313 CrPC admissions are relevant and may be relied upon in conjunction with the complainant’s testimony to establish locus standi. The appellate court declined to admit additional evidence under Section 391 CrPC, as the complainant could have produced those documents at trial and did not demonstrate due diligence or new discovery. The matter was remitted for adjudication on merits, as the trial court had not considered other aspects of the case. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
The complainant, Malkiat Singh, filed a Section 138 NI Act complaint on behalf of a partnership firm, alleging that goods supplied to the accused were unpaid as the cheque issued was dishonoured. The accused, in Section 313 CrPC statement, admitted the partnership and complainant’s status but contested liability, claiming cheque was provided as security. The trial court acquitted the accused solely for non-production of partnership deed/written authorisation. The complainant’s application for additional evidence (to produce the deed) was rejected by the appellate court on grounds of lack of diligence and to prevent undue retrial. The High Court found the trial court erred in not considering the Section 313 CrPC admission and set aside the acquittal. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Himachal Pradesh |
| Persuasive For | Other High Courts and courts dealing with similar NI Act and Partnership Act matters |
| Distinguishes | Shirgul Filling Station v. Kamal Sharma, 2025:HHC:21725-DB |
| Follows |
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What’s New / What Lawyers Should Note
- The High Court clarified that a technical acquittal for lack of partnership deed or written authorisation is improper when the accused’s Section 313 CrPC statement admits partnership and the complainant’s status.
- Section 313 CrPC admissions can be read with complainant’s evidence for establishing locus standi in NI Act complaints initiated by a firm.
- Partners are considered agents of the firm under Section 18 of the Partnership Act and may file complaints unless some authority to the contrary is shown.
- Applications for additional evidence at the appellate stage will be refused if the party could have produced such evidence at trial and fails to show due diligence.
- The judgment sets clear parameters for appeals against acquittal—interference is warranted only when the acquittal is perverse or based on misreading/omission of material evidence.
Summary of Legal Reasoning
- The court outlined the principles for appellate interference with acquittals, emphasizing that such interference is reserved for perverse, incomprehensible, or material-ignoring decisions (relied on Surendra Singh v. State of Uttarakhand, Babu Sahebagouda Rudragoudar, Rajesh Prasad v. State of Bihar, H.D. Sundara v. State of Karnataka, State of M.P. v. Ramveer Singh).
- On the application for leading additional evidence under Section 391 CrPC, the court cited Supreme Court precedents (State of Rajasthan v. Asharam, Sukhjeet Singh v. State of U.P., H.N. Jagadeesh v. R. Rajeshwari, Rajvinder Singh v. State of Haryana, Ajitsinh Chehuji Rathod v. State of Gujarat), holding that such evidence may only be admitted where due diligence was exercised and not for filling lacunae or reversing acquittals.
- The complainant’s examination alone was insufficient to establish locus, but the accused’s Section 313 CrPC admission (that the complainant was a partner) could be relied upon, following State of Maharashtra v. Sukhdev Singh, Mohan Singh v. Prem Singh, Ramnaresh v. State of Chhattisgarh, and other Supreme Court rulings. Such admissions, when corroborative of prosecution evidence, may be used in determining maintainability.
- The Bombay High Court in Reshmi Constructions v. Laxman Vithal Chunekar was followed to hold that a partner’s authority to act for the firm is presumed unless specifically limited.
- The High Court distinguished Shirgul Filling Station v. Kamal Sharma, as in the present case, the basic facts were admitted under Section 313 CrPC, unlike in Shirgul.
- As the trial court decided solely on technical locus without adjudicating merits, the matter was remitted for a fresh trial.
Arguments by the Parties
Petitioner/Complainant
- Argued that the trial court erred in acquitting on a technicality, as the accused admitted the complainant’s partnership under Section 313 CrPC.
- Submission that failure to produce partnership deed should not defeat maintainability where the basic facts are admitted.
- Prayed for setting aside the acquittal and for permission to produce additional evidence (partnership deed/account statements).
Respondent/Accused
- Supported the trial court’s view that a complainant must prove they are the payee or holder in due course; in absence, complaint is not maintainable.
- Relied on Shirgul Filling Station v. Kamal Sharma to contend lack of maintainability absent proper proof of status.
- Opposed admission of additional evidence on grounds of lack of due diligence at the trial stage.
Factual Background
The complainant, claiming to be a partner of M/s Gee Ess Trading Company, supplied goods on credit to the accused, who issued a cheque of ₹3,63,670/- that was dishonoured for insufficient funds. The accused, while admitting in her Section 313 CrPC statement that she purchased goods from the firm and that the complainant was a partner, disputed liability by claiming the cheque was provided as security. The trial court acquitted the accused solely on the ground of non-production of the partnership deed or written authorisation by the complainant to file the complaint, without considering other merits. The appellate complaint included an application to lead additional evidence, which was rejected for lack of diligence.
Statutory Analysis
- Section 138, Negotiable Instruments Act: The basis for prosecution of dishonoured cheque for liability.
- Section 313, CrPC: Detailed interpretation of the accused’s statement as relevant material that can corroborate the complainant’s status and the facts admitted.
- Section 391, CrPC: Interpreted restrictively, in line with Supreme Court authority, to mean that additional evidence can be admitted at appellate stage only for ends of justice and not where evidence existed and could have been produced at the trial.
- Section 18, Partnership Act: Every partner is the agent of the firm and may act in the firm’s name unless otherwise agreed.
Procedural Innovations
The judgment does not set new procedural rules but reiterates that appellate courts should not admit additional evidence under Section 391 CrPC except in rare circumstances—particularly not to fill gaps or reverse acquittals where materials could have been filed earlier.
Alert Indicators
- ✔ Precedent Followed – The decision follows and clarifies existing Supreme Court and High Court precedent regarding the consideration of Section 313 CrPC admissions and the strict approach to additional evidence under Section 391 CrPC.