Case Note & Summary
The petitioners, Western Projects Limited (a company) and Dinesh Singh Mehta (a director), were original accused Nos. 13 and 14 in Criminal Case No. 47/2007 (CC No. 66/M/2007) filed by respondent No. 2, Mahesh Jaysukhlal Patria, before the Additional Metropolitan Magistrate, Mumbai. The complaint alleged offences under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, concerning dishonour of cheques. The Magistrate passed an order under Section 156(3) CrPC directing police investigation. The petitioners sought quashing of the proceedings, arguing that the complaint did not contain specific averments that they were in charge of and responsible for the conduct of the business at the time of the offence, as required for vicarious liability under Section 141. The High Court, after hearing arguments, held that the complaint lacked necessary averments to attract vicarious liability. The court noted that the petitioners were not signatories to the cheques and no specific role was attributed to them. Consequently, the court quashed the proceedings against the petitioners, allowing the writ petition.
Headnote
A) Criminal Law - Negotiable Instruments Act - Quashing of Proceedings - Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 - Vicarious Liability - The court considered whether the complaint contained specific averments that the petitioners, being directors of the company, were in charge of and responsible for the conduct of the business at the time the offence was committed. Held that the complaint lacked necessary averments to attract vicarious liability, and thus the proceedings were liable to be quashed (Paras 1-8).
Issue of Consideration
Whether criminal proceedings against the petitioners (accused Nos. 13 and 14) under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 can be quashed for lack of specific averments regarding their role and responsibility at the time of the offence.
Final Decision
The High Court allowed the writ petition and quashed the criminal proceedings against the petitioners (original accused Nos. 13 and 14) in Criminal Case No. 47/2007 (CC No. 66/M/2007) pending before the Additional Metropolitan Magistrate, Mumbai.
Law Points
- Vicarious liability under Section 141 NI Act requires specific averments
- Quashing of criminal proceedings for lack of vicarious liability
- Section 482 CrPC inherent powers
- Section 156(3) CrPC order for investigation
Case Details
2012 LawText (BOM) (06) 54
Criminal Writ Petition No. 2193 of 2007
A.M. Khanwilkar, A.R. Joshi
Shirish Gupte (Senior counsel) with Subodh Desai and Ms Sonal for Petitioners, Ms P.H. Khantharia for Respondent No.1, Raja Thakare with A.M. Chimalkar for Respondent No.2
Western Projects Limited and Dinesh s/o Sri Sukumar Singh Mehta
State of Maharashtra and Mahesh Jaysukhlal Patria
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Nature of Litigation
Criminal writ petition seeking quashing of proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
Remedy Sought
Quashing of Criminal Case No. 47/2007 (CC No. 66/M/2007) pending before the Additional Metropolitan Magistrate, Mumbai, against the petitioners.
Filing Reason
The petitioners were arraigned as accused Nos. 13 and 14 in a complaint for dishonour of cheques, but the complaint lacked specific averments regarding their role and responsibility as directors at the time of the offence.
Previous Decisions
The writ petition was admitted on 1.2.2008 and stay was granted in terms of prayer clauses (b) and (c). The matter was taken before the Supreme Court in SLP (Cri) No. 4879/2008, which directed expeditious hearing of the writ petition.
Issues
Whether the complaint contains specific averments that the petitioners were in charge of and responsible for the conduct of the business at the time the offence was committed, as required under Section 141 of the Negotiable Instruments Act, 1881.
Submissions/Arguments
Petitioners argued that the complaint did not contain specific averments regarding their role and responsibility, and they were not signatories to the cheques.
Respondents argued that the proceedings should continue as the matter required trial.
Ratio Decidendi
For vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, the complaint must contain specific averments that the director was in charge of and responsible for the conduct of the business at the time the offence was committed. In the absence of such averments, the proceedings against such director are liable to be quashed.
Judgment Excerpts
By the present writ petition, original accused Nos. 13 and 14 i.e. present petitioners have prayed for quashing the proceedings filed against them by original complainant / present respondent No.2.
The complaint lacked necessary averments to attract vicarious liability under Section 141 of the Negotiable Instruments Act.
Procedural History
The complaint was filed as Criminal Case No. 47/2007 (CC No. 66/M/2007) before the Additional Metropolitan Magistrate, Mumbai. The Magistrate passed an order under Section 156(3) CrPC directing police investigation. The petitioners filed the present writ petition in the High Court, which was admitted on 1.2.2008 with stay. The matter was taken to the Supreme Court in SLP (Cri) No. 4879/2008, which directed expeditious hearing. The High Court heard the matter and delivered judgment on 14.6.2012.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 141
- Code of Criminal Procedure, 1973 (CrPC): 156(3), 482
