Case Note & Summary
The Bombay High Court decided four criminal writ petitions involving the same parties and a common question of law: whether a prosecution under Section 138 of the Negotiable Instruments Act, 1881 against a partner alone without joining the partnership firm is maintainable. The petitioner, Philip J., was a partner of M/s Alamgiris, a partnership firm. The respondent, Ashapura Minechem Ltd., a company, entered into an agreement with the firm to purchase iron ore fines. The petitioner failed to supply the ore, causing damages. The respondent filed a complaint under Section 138 of the NI Act against the petitioner alone, without impleading the firm. The Judicial Magistrate issued process, and the Sessions Court confirmed it. The petitioner challenged these orders. The court analyzed the language of Section 138 and Section 141 of the NI Act, noting that Section 141 creates vicarious liability for partners. It held that a partner can be prosecuted individually even if the firm is not made a party, as the liability extends to every person in charge of the business. The court dismissed the petitions, upholding the maintainability of the complaint.
Headnote
A) Negotiable Instruments Act - Section 138 - Maintainability of Complaint Against Partner Without Firm - The court considered whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 can proceed against a partner alone without impleading the partnership firm. The court held that a partner is vicariously liable for the acts of the firm and can be prosecuted individually even if the firm is not made a party, as the liability under Section 138 extends to every person who at the time of the offence was in charge of and responsible for the conduct of the business of the firm. (Paras 1-14)
Issue of Consideration
Whether a prosecution under Section 138 of the Negotiable Instruments Act, 1881 against a partner alone without joining the partnership firm is maintainable.
Final Decision
The court dismissed all four writ petitions, holding that the prosecution under Section 138 of the Negotiable Instruments Act, 1881 against a partner alone without joining the partnership firm is maintainable.
Law Points
- Section 138 of the Negotiable Instruments Act
- 1881
- vicarious liability of partner
- maintainability of complaint against partner without impleading firm
Case Details
2016 LawText (BOM) (01) 72
Criminal Writ Petition No. 2909 of 2013 with Criminal Writ Petition No. 2910 of 2013 with Criminal Writ Petition No. 2914 of 2013 with Criminal Writ Petition No. 2915 of 2013
Dr. Shalini Phansalkar-Joshi, J.
Mr. P.H. Naik i/b Mr. Sachin R. Pawar for the petitioner, Mr. Amrut Joshi with Mr. Rushabh Seth i/b M.S. Bodhanwalla & Co. for respondent no.1, Mr. Deepak Thakare, A.P.P. for respondent no.2 – State
Ashapura Minechem Ltd., The State of Maharashtra
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Nature of Litigation
Criminal writ petitions challenging orders issuing process under Section 138 of the Negotiable Instruments Act, 1881 against a partner without joining the partnership firm.
Remedy Sought
The petitioner sought quashing of the order of issue of process and the revisional order confirming it.
Filing Reason
The petitioner was prosecuted under Section 138 of the NI Act for dishonour of cheque issued by him as partner of a firm, but the firm was not made a party to the complaint.
Previous Decisions
The Judicial Magistrate, First Class, Shrivardhan issued process on 3rd January 2012 in Summary Case No. 312 of 2011. The Additional Sessions Judge, Mangaon confirmed that order on 23rd July 2013 in Criminal Revision Petition No.7 of 2012.
Issues
Whether a prosecution under Section 138 of the Negotiable Instruments Act, 1881 against a partner alone without joining the partnership firm is maintainable.
Submissions/Arguments
The petitioner argued that the complaint is not maintainable as the partnership firm is not impleaded, and the partner cannot be held liable without the firm.
The respondent argued that under Section 141 of the NI Act, a partner is vicariously liable and can be prosecuted individually.
Ratio Decidendi
A partner is vicariously liable for the acts of the firm under Section 141 of the Negotiable Instruments Act, 1881, and can be prosecuted individually under Section 138 even if the firm is not made a party to the complaint.
Judgment Excerpts
In all these four writ petitions, the parties are one and same and they raise a common question of law as to whether a prosecution launched under section 138 of the Negotiable Instruments Act against a partner alone without joining the partnership firm can be maintainable.
Procedural History
The respondent filed a complaint under Section 138 of the NI Act against the petitioner alone. The Judicial Magistrate issued process on 3rd January 2012. The petitioner filed a revision, which was dismissed by the Additional Sessions Judge on 23rd July 2013. The petitioner then filed the present writ petitions.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 141
