Case Note & Summary
The petitioners, who were directors of the accused company, filed a criminal writ petition under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the process issued against them in a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complaint was filed by the respondent company alleging dishonour of a cheque issued by the accused company. The petitioners contended that the complaint did not contain any specific averments that they were in charge of and responsible for the conduct of the business of the company at the time the offence was committed. The court, after examining the complaint, found that the allegations against the petitioners were vague and did not satisfy the requirement of vicarious liability under Section 141 of the Negotiable Instruments Act. The court held that in the absence of specific averments, the process issued against the petitioners could not be sustained and was liable to be quashed. The court allowed the petition and quashed the process against the petitioners.
Headnote
A) Criminal Law - Negotiable Instruments Act, 1881 - Section 138 - Vicarious Liability of Directors - Quashing of Process - The court considered whether directors of a company can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881 without specific allegations that they were in charge of and responsible for the conduct of the business of the company at the time of the offence. The court held that in the absence of such specific averments, the process issued against the directors is liable to be quashed. (Paras 1-10) B) Criminal Procedure Code, 1973 - Section 482 - Inherent Powers - Quashing of Complaint - The court examined the scope of its inherent powers under Section 482 of the Code of Criminal Procedure, 1973 to quash a criminal complaint where the allegations do not make out a prima facie case against the accused. The court held that where the complaint lacks essential averments to constitute the offence, the proceedings can be quashed to prevent abuse of process. (Paras 1-10)
Issue of Consideration
Whether the process issued against the petitioners (directors of the accused company) under Section 138 of the Negotiable Instruments Act, 1881 can be quashed in the absence of specific averments regarding their role in the day-to-day affairs of the company.
Final Decision
The court allowed the petition and quashed the process issued against the petitioners in Complaint No. 360//SS/2016.
Law Points
- Vicarious liability
- Section 138 Negotiable Instruments Act
- 1881
- Quashing of criminal proceedings
- Lack of specific averments
- Directors not liable without active role
