Punjab & Haryana High Court Refuses to Quash Summoning Order in Cheque Bounce Case; Holds Active Participation of AOP Members Prima Facie Sufficient Under Section 141 NI Act

Case Name: Love Kohli and Others v. M/s Devans Modern Breweries Ltd.
Date of Judgment: 11 December 2025
Citation: CRM-M-51132 of 2025
Bench: Hon’ble Mr. Justice Subhas Mehla

Held: The Punjab and Haryana High Court declined to quash the summoning order and the revisional order passed in proceedings arising out of dishonour of a cheque issued by an Association of Persons. The Court held that where the complaint contains a clear averment that all members of the association were in charge of and responsible for its day to day affairs, the statutory requirement under Section 141 of the Negotiable Instruments Act stands satisfied. The Court further held that whether the petitioners were actively involved in the conduct of business or were merely sleeping partners is a factual issue to be determined during trial and not at the stage of exercising inherent jurisdiction for quashing.

Summary: The complainant supplied beer to an Association of Persons operating under the name M/s Adesh Associates, formed by the petitioners along with another member. Under the association agreement, liquor vend licences allotted to any member were treated as business of the association, and decisions regarding trade were to be taken collectively by mutual consent.

Towards discharge of liability, a cheque issued by the association was dishonoured, leading to initiation of proceedings under Section 138 of the Negotiable Instruments Act. The petitioners sought quashing of the summoning and revisional orders on the ground that they were not in charge of day to day affairs, were not signatories to the cheque, and that only one member was authorised to operate the bank account and represent the association.

The Court examined the governing agreement and found that it provided for collective decision making, equal participation, entitlement to profits, withdrawals from capital accounts, and salary to members. It held that authorisation of one member to operate the bank account did not dilute the collective responsibility of other members, particularly when the agreement reflected joint control over business affairs. The Court also noted that the complaint specifically averred active involvement of all members in the day to day affairs of the association.

Relying on Supreme Court precedent, the Court reiterated that the complainant is not required to plead the specific internal role of each accused and that once the foundational averment under Section 141 is made, the burden shifts to the accused to establish lack of involvement during trial.

Decision: The High Court dismissed the petition and upheld the summoning and revisional orders, holding that no case was made out for exercise of inherent jurisdiction and that the question of actual involvement of the petitioners must be adjudicated by the trial court on evidence.