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        2018 (4) TMI 1924 - HC - Indian Laws

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        Specific averments are essential to fasten vicarious liability in cheque dishonour complaints against partners or directors. Vicarious criminal liability for dishonour of cheque cannot be presumed from a person's status as partner or director alone. A complaint under the ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Specific averments are essential to fasten vicarious liability in cheque dishonour complaints against partners or directors.

                          Vicarious criminal liability for dishonour of cheque cannot be presumed from a person's status as partner or director alone. A complaint under the Negotiable Instruments Act must specifically aver that the accused was in charge of and responsible for the conduct of the business at the relevant time; without those foundational facts, cognizance is unsustainable. On the stated facts, the complaint lacked the necessary specific averments against the petitioner, so the High Court quashed the complaint.




                          Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act could be sustained against a partner/director in the absence of specific averments that the person was in charge of and responsible for the conduct of the business of the firm/company at the relevant time.

                          Analysis: Vicarious criminal liability for an offence by a firm or company is not automatic. The complaint must contain the specific factual averments required by law to show that the accused was in charge of and responsible for the business of the concern at the relevant time. Mere description as a partner or officer is insufficient unless the complaint also pleads the necessary role and responsibility, and liability cannot be inferred in the absence of such foundational assertions.

                          Conclusion: The complaint did not contain the requisite specific averments against the petitioner, and cognizance taken on that basis was unsustainable. The petition was therefore allowed and the complaint was quashed.

                          Ratio Decidendi: Vicarious liability for an offence by a firm or company under the Negotiable Instruments Act can be fastened only when the complaint specifically pleads that the accused was in charge of and responsible for the conduct of the business at the relevant time.


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                          ActsIncome Tax
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