Vicarious liability in cheque dishonour cases requires specific Section 141 averments, and Section 139 presumption can be rebutted.
A non-signatory partner cannot be made vicariously liable in a Section 138 NI Act complaint unless the pleading specifically states that the partner was in charge of and responsible for the firm's business at the relevant time; the firm's complaint through its partners remained competent, and the signatory partner could still be proceeded against. The presumption under Section 139 is rebuttable on a preponderance of probabilities, and it was displaced where the cheques were issued against unsettled accounts, provisional bills, and an unsubstantiated interest claim. Once rebutted, the complainant had to prove an ascertained, legally enforceable debt, which it failed to do.
Issues: (i) Whether the complaints under Section 138 of the Negotiable Instruments Act, 1881 were maintainable against the accused partners in the absence of the requisite averments under Section 141, and whether the complaint by the firm was competent; (ii) Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 by showing that the cheques were not issued towards an ascertained and legally enforceable debt.
Issue (i): Whether the complaints under Section 138 of the Negotiable Instruments Act, 1881 were maintainable against the accused partners in the absence of the requisite averments under Section 141, and whether the complaint by the firm was competent;
Analysis: A complaint by the payee firm was held competent where it was instituted through its partners. However, for fastening liability on a partner who is not the signatory to the cheque, the complaint must contain the specific averment that such partner was in charge of and responsible for the conduct of the business of the firm at the relevant time. In the absence of such averment, vicarious liability could not be sustained against the non-signatory partner. The signatory partner could still be proceeded against on the footing of execution of the cheques.
Conclusion: The complaint was maintainable as against the firm and the signatory partner, but not maintainable as against the non-signatory partner in the absence of the requisite averments.
Issue (ii): Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 by showing that the cheques were not issued towards an ascertained and legally enforceable debt.
Analysis: The presumption under Section 139 extends to the existence of a legally enforceable debt, but it remains rebuttable on a preponderance of probabilities. The materials on record showed that the accounts were not finally settled when the cheques were issued, that the amounts were based on provisional bills, that the alleged interest component was not supported by any written agreement or consistent accounting treatment, and that the cheques were issued in the context of an unsettled commercial dispute. These circumstances constituted a probable defence sufficient to displace the statutory presumption, after which the complainant was required to prove the debt beyond reasonable doubt and failed to do so.
Conclusion: The accused successfully rebutted the statutory presumption, and the complainant failed to prove that the cheques were issued towards an ascertained legally enforceable debt.
Final Conclusion: The appeals failed because the complaints were not sustainable against the non-signatory partner and the complainant did not establish the ingredients of the offence under Section 138 of the Negotiable Instruments Act, 1881 against the remaining accused.
Ratio Decidendi: In proceedings under Section 138 of the Negotiable Instruments Act, 1881, a partner who is not the cheque signatory can be proceeded against only if the complaint specifically pleads the requirements of Section 141, and the statutory presumption as to liability stands rebutted where the accused shows on a preponderance of probabilities that the cheque was issued without an ascertained legally enforceable debt.
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