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        2019 (2) TMI 544 - HC - Indian Laws

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        Vicarious liability of partners in cheque dishonour complaints turns on specific averments of responsibility and control over business. A complaint seeking prosecution of partners under section 141 of the Negotiable Instruments Act must contain basic averments that they were in charge of ...
                        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.

                            Vicarious liability of partners in cheque dishonour complaints turns on specific averments of responsibility and control over business.

                            A complaint seeking prosecution of partners under section 141 of the Negotiable Instruments Act must contain basic averments that they were in charge of and responsible for the firm's business at the relevant time. The complaint here did so by alleging that the accused controlled the firm, handled day-to-day affairs, purchased goods, made payments, and were authorised to sign cheques, which was sufficient to sustain issuance of process. Material relied on to deny their role did not conclusively negate those averments, and the rare threshold for quashing under section 482 CrPC on the basis of unimpeachable material was not met. The challenge to process issuance therefore failed.




                            Issues: Whether the complaint disclosed the basic averments required to proceed against partners under section 141 of the Negotiable Instruments Act, 1881, and whether the order issuing process could be quashed on the basis of material said to negate their role in the transaction.

                            Analysis: For vicarious liability under section 141, the complaint must aver that the persons sought to be prosecuted were in charge of and responsible for the conduct of the business of the firm at the relevant time. The complaint, read as a whole, specifically stated that the firm was run and controlled by the accused, that they were personally involved in day-to-day affairs, that they purchased goods and made payments on behalf of the firm, and that they were authorised to sign cheques. Such averments satisfied the basic requirement for issuance of process. The material relied on by the applicants, including invoices placed in another proceeding, did not conclusively establish that they had no role in the transaction or in the issuance of cheques. Inherent jurisdiction under section 482 of the Code of Criminal Procedure, 1973 can be exercised even where basic averments exist, but only in rare cases where unimpeachable material destroys the substratum of the complaint. That threshold was not met.

                            Conclusion: The challenge to the issuance of process failed, and quashing was not warranted.


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                            ActsIncome Tax
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