Case Note & Summary
The petitioner, Kailash Waghmare, filed a criminal writ petition challenging the orders of the learned Magistrate and the revisional Court which discharged the respondent (accused no.1), the Manager of Maharshi Sudarshan Bahuuddeshiya Seva Sahakari Sanstha Maryadit, from a complaint under Section 138 of the Negotiable Instruments Act, 1881. The petitioner had alleged that the respondent, along with two others (Secretary and Member), issued a cheque which was dishonoured. The Magistrate issued process only against accused nos.2 and 3 (the signatories) and discharged the respondent on the ground that he was not a signatory to the cheque. The revisional Court dismissed the petitioner's revision on 23/1/2009. The High Court noted that the Magistrate and the revisional Court failed to consider the vicarious liability of the respondent as a person in charge of and responsible for the conduct of the business of the society at the time the offence was committed. The Court held that the discharge was improper and set aside the impugned orders, directing the Magistrate to reconsider the matter afresh in accordance with law, after hearing both parties.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Vicarious Liability - Section 138 - Discharge of Manager - The Magistrate discharged the Manager of the society solely on the ground that he was not a signatory to the cheque, without considering his liability as a person in charge of and responsible for the conduct of the business of the society. The revisional Court also failed to correct this error. Held that the discharge was improper and the matter requires reconsideration (Paras 4-6).
Issue of Consideration
Whether the learned Magistrate and the revisional Court were justified in discharging the respondent/accused no.1 (Manager) from the complaint under Section 138 of the Negotiable Instruments Act, 1881, on the ground that he was not a signatory to the cheque, without considering his vicarious liability as a person in charge of the conduct of the business of the society.
Final Decision
The High Court allowed the petition, set aside the orders of the learned Magistrate and the revisional Court, and directed the learned Magistrate to reconsider the matter afresh in accordance with law, after hearing both parties.
Law Points
- Section 138 of the Negotiable Instruments Act
- 1881
- vicarious liability
- person in charge of conduct of business
- discharge without proper reasoning
- revisional court's duty
Case Details
2017 LawText (BOM) (09) 214
Criminal Writ Petition No.444 of 2009
Shri Kailash s/o Natthuji Waghmare
Maharshi Sudarhan Bahuuddeshiya Seva Sahakari Sanstha Maryadit, through its Manager Shri Kishor s/o Shankarlal Birha
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Nature of Litigation
Criminal writ petition challenging the orders of the Magistrate and revisional Court discharging the respondent from a complaint under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
The petitioner sought to set aside the orders of the Magistrate and revisional Court and to direct the Magistrate to take cognizance against the respondent.
Filing Reason
The petitioner filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the respondent (Manager) and two others (Secretary and Member) alleging that a cheque issued by them was dishonoured. The Magistrate issued process only against the signatories and discharged the respondent on the ground that he was not a signatory.
Previous Decisions
The learned Magistrate discharged the respondent/accused no.1. The revisional Court dismissed the petitioner's revision on 23/1/2009.
Issues
Whether the Magistrate was justified in discharging the respondent/accused no.1 solely on the ground that he was not a signatory to the cheque, without considering his vicarious liability as a person in charge of the conduct of the business of the society.
Whether the revisional Court erred in dismissing the revision without correcting the Magistrate's order.
Submissions/Arguments
The petitioner argued that the respondent, being the Manager of the society, was in charge of and responsible for the conduct of its business and thus vicariously liable under Section 138 of the Negotiable Instruments Act, 1881.
The respondent did not appear or file any submissions.
Ratio Decidendi
A person who is in charge of and responsible for the conduct of the business of a company or society at the time of the offence can be held vicariously liable under Section 138 of the Negotiable Instruments Act, 1881, even if he is not a signatory to the cheque. The Magistrate must consider such liability before discharging an accused.
Judgment Excerpts
The learned trial Court while passing such order discharging accused no.1 does not appear to have properly worded the order and has not considered the fact that accused no.1 being Manager of the Society is in charge of and responsible for the conduct of the business of the Society and as such is vicariously liable for the offence.
In the circumstances, the impugned orders are required to be set aside and the matter is required to be remitted back to the learned Magistrate for reconsideration.
Procedural History
The petitioner filed a complaint under Section 138 of the Negotiable Instruments Act, 1881. The Magistrate issued process against accused nos.2 and 3 (signatories) and discharged accused no.1 (respondent/Manager). The petitioner filed a revision before the Sessions Court, which was dismissed on 23/1/2009. The petitioner then filed the present criminal writ petition before the High Court on 29/8/2009, and stay of trial was granted. The High Court heard the matter and delivered judgment on 26/9/2017.
Acts & Sections
- Negotiable Instruments Act, 1881: 138
