Case Note & Summary
The judgment pertains to two criminal writ petitions filed by employees and directors of a company seeking quashing of an FIR registered under Section 138 of the Negotiable Instruments Act, 1881, read with other provisions. The complainant, Khushnuma H. Behram, alleged that a cheque issued by the company was dishonoured. The petitioners, who were not signatories to the cheque and had no specific role in the transaction, were arraigned as accused. The court examined the principles of vicarious liability under Section 138 and held that in the absence of specific allegations regarding the petitioners' involvement in the issuance of the cheque, they cannot be prosecuted. The court quashed the FIR against the petitioners, emphasizing that continuing the proceedings would be an abuse of process.
Headnote
A) Criminal Law - Negotiable Instruments Act - Section 138 - Vicarious Liability - Directors and Employees - Quashing of FIR - The court considered whether employees and directors of a company can be held liable under Section 138 of the Negotiable Instruments Act, 1881, without specific allegations of their involvement in the issuance of the cheque. Held that in the absence of specific averments showing the role of the petitioners in the transaction, the criminal proceedings against them are liable to be quashed. (Paras 1-15) B) Criminal Procedure Code - Section 482 - Inherent Powers - Quashing of FIR - The court exercised its inherent powers under Section 482 of the Code of Criminal Procedure, 1973, to quash the FIR against the petitioners as the continuation of proceedings would be an abuse of process of law. (Paras 16-20)
Issue of Consideration
Whether the petitioners, who are employees and directors of a company, can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, in the absence of specific allegations regarding their role in the issuance of the dishonoured cheque.
Final Decision
The court allowed the petitions and quashed the FIR against the petitioners.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- vicarious liability
- directors and employees
- specific allegations
- criminal proceedings
- quashing of FIR
