Vicarious liability in cheque dishonour cases requires specific averments; vague allegations against a retired partner are insufficient.

For prosecution under section 138 read with section 142 of the Negotiable Instruments Act, the complaint must contain specific averments showing that the accused was in charge of and responsible for the firm's business, or that the offence was committed with her consent or knowledge. A partner's claim of retirement could not be conclusively tested in quash proceedings on the basis of unregistered reconstitution papers alone, and an unregistered firm required public notice of retirement under the Partnership Act to avoid liability to third parties. On the facts pleaded, the allegations against the partner were found vague and did not disclose any active role in the firm's business, so the proceedings were quashed.

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Issues: Whether the criminal proceedings under section 138 read with section 142 of the Negotiable Instruments Act could be quashed against a partner who claimed to have retired from the firm, and whether the complaint contained sufficient specific averments to fasten vicarious liability on her.

Analysis: The petitioner relied on an unregistered deed of reconstitution, income-tax returns, and a purported resignation to contend that she had ceased to be a partner before the cheques were issued. The Court held that the truth and validity of the unregistered documents could not be conclusively determined in the quash proceedings, but the legal effect of retirement had still to be tested against sections 45 and 72 of the Partnership Act, 1932. Since the firm was unregistered, retirement of a partner required public notice by publication in the Official Gazette and in a vernacular newspaper. In the absence of such notice, the petitioner could not avoid liability to third parties. However, for prosecution under section 138 of the Negotiable Instruments Act, the complaint had to contain specific allegations showing that the accused was in charge of and responsible for the conduct of the business, or that the offence occurred with her consent or knowledge. The complaint in the present case alleged that the petitioner was in charge of the firm and that the cheques were issued with her consent and knowledge. Yet, the Court found these allegations vague and insufficient, as they did not disclose any active role played by her in the business of the firm.

Conclusion: The complaint did not disclose sufficient material to prosecute the petitioner under section 138 read with section 142 of the Negotiable Instruments Act, and the proceedings against her were liable to be quashed.

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