Case Note & Summary
The petitioners, who are the Chairman and Manager of a cooperative society (Shri Rajiv Gandhi Sahakari Nagari Path Sanstha Maryadit), were arraigned as accused Nos. 1, 2, and 3 in R.T.C. No. 299/2006 pending before the Chief Judicial Magistrate, Ahmednagar, for offences punishable under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The complaint was filed by the respondent No. 2 (Bhivsen Deoram Kandekar) alleging dishonour of a cheque issued by the society. The petitioners sought quashing of the proceedings on the ground that there were no specific allegations in the complaint that they were in charge of and responsible for the conduct of the business of the society at the time of the offence. The High Court examined the complaint and found that it contained only general allegations against all accused, without specifying the role of each petitioner. The court held that for vicarious liability under Section 141 of the Negotiable Instruments Act, there must be specific averments that the accused was in charge of and responsible for the conduct of the business. Since the complaint lacked such averments, the proceedings against the petitioners were quashed. The court allowed the petition and set aside the process issued against the petitioners.
Headnote
A) Criminal Law - Dishonour of Cheque - Vicarious Liability - Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 - Directors/Officers of a company or society cannot be held vicariously liable for an offence under Section 138 unless there are specific allegations that they were in charge of and responsible for the conduct of the business of the company/society at the time of the offence - The complaint must contain averments that the accused was in charge of and responsible for the conduct of the business - In the absence of such averments, proceedings are liable to be quashed (Paras 5-7).
Issue of Consideration
Whether criminal proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 can be sustained against the Chairman and Manager of a cooperative society without specific allegations that they were in charge of and responsible for the conduct of the business of the society at the time of the offence.
Final Decision
The petition is allowed. The criminal proceedings in R.T.C. No. 299/2006 pending before the Chief Judicial Magistrate, Ahmednagar, are quashed and set aside insofar as the petitioners are concerned. Rule is made absolute accordingly.
Law Points
- Vicarious liability
- Dishonour of cheque
- Section 138 Negotiable Instruments Act
- 1881
- Section 141 Negotiable Instruments Act
- Criminal proceedings quashed
- Lack of specific allegations
Case Details
2013 LawText (BOM) (10) 15
Criminal Writ Petition No. 479 of 2011
Mr. R.R. Karpe, Mr. B.L. Dhas, Mr. P.S. Pawar
Shri. Rajiv Gandhi Sahakari Nagari Path Sanstha Maryadit, Shri.Udhavrao S/o Marutrao Dusunge, Shri. Shivaji S/o Bhaskar Waman
The State of Maharashtra, Shri. Bhivsen Deoram Kandekar
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Criminal writ petition seeking quashing of proceedings in a complaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
Remedy Sought
The petitioners (accused) sought quashing of the criminal proceedings in R.T.C. No. 299/2006 pending before the Chief Judicial Magistrate, Ahmednagar.
Filing Reason
The petitioners were arraigned as accused in a complaint for dishonour of cheque, but the complaint lacked specific allegations that they were in charge of and responsible for the conduct of the business of the society.
Previous Decisions
The Chief Judicial Magistrate, Ahmednagar had issued process against the petitioners.
Issues
Whether the complaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 contains specific allegations that the petitioners were in charge of and responsible for the conduct of the business of the society at the time of the offence.
Whether the proceedings against the petitioners are liable to be quashed for lack of vicarious liability.
Submissions/Arguments
The petitioners argued that the complaint does not contain any specific allegations that they were in charge of and responsible for the conduct of the business of the society, and therefore, they cannot be held vicariously liable under Section 141 of the Negotiable Instruments Act.
The respondent No. 2 (complainant) opposed the petition, but the court found that the complaint only contained general allegations against all accused without specifying the role of each petitioner.
Ratio Decidendi
For vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, there must be specific averments in the complaint that the accused was in charge of and responsible for the conduct of the business of the company/society at the time of the offence. General allegations against all accused are insufficient to attract vicarious liability.
Judgment Excerpts
The complaint does not contain any specific allegations that the petitioners were in charge of and responsible for the conduct of the business of the society at the time of the offence.
In the absence of such averments, the proceedings against the petitioners are liable to be quashed.
Procedural History
The complaint was filed by respondent No. 2 before the Chief Judicial Magistrate, Ahmednagar, who issued process against the petitioners. The petitioners then filed Criminal Writ Petition No. 479 of 2011 before the Bombay High Court (Aurangabad Bench) seeking quashing of the proceedings.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 141
