Trustees' vicarious liability under cheque dishonour law fails where a trust is not treated as an association of individuals.

For purposes of section 141 of the Negotiable Instruments Act, a trust is not a body corporate or an association of individuals, because trustees do not form a juristic entity or combine for a common purpose of their own but only administer trust property for beneficiaries. On that basis, trustees cannot be exposed to vicarious criminal liability merely by virtue of office. Where the complaint shows that particular trustees were not signatories to the cheque, proceedings against them cannot be sustained under section 141 and may be quashed to prevent unwarranted continuation of prosecution.

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Issues: (i) whether a trust falls within the expression "body corporate" or "association of individuals" in the Explanation to section 141 of the Negotiable Instruments Act, 1881, so as to attract vicarious liability against its trustees for an offence under section 138; (ii) whether the complaint and further proceedings could be quashed against trustees who were not signatories to the cheque.

Issue (i): Whether a trust falls within the expression "body corporate" or "association of individuals" in the Explanation to section 141 of the Negotiable Instruments Act, 1881, so as to attract vicarious liability against its trustees for an offence under section 138.

Analysis: A trust was held not to be a juristic person or a legal entity capable of suing and being sued like a body corporate. Referring to the Indian Trusts Act, 1882, the Court noted that trustees hold and administer trust property for beneficiaries and do not combine for a common purpose or common benefit of their own. Applying the settled meaning of "association of persons/body of individuals", the Court concluded that a mere collection of trustees administering trust property does not amount to an association of individuals. Support was also drawn from the view that a trust is not an "association of persons" under analogous statutory language.

Conclusion: A trust is neither a body corporate nor an association of individuals for the purpose of section 141, and trustees cannot be proceeded against vicariously on that basis.

Issue (ii): Whether the complaint and further proceedings could be quashed against trustees who were not signatories to the cheque.

Analysis: The complaint showed that only two accused had signed the cheque, while the petitioners had not signed it. Since the petitioners were not signatories and the prosecution against them could not be sustained on the basis of section 141, continuation of proceedings would serve no purpose. The inherent power of the Court was invoked to secure the ends of justice.

Conclusion: The complaint and further proceedings were liable to be quashed against the petitioners.

Final Conclusion: The Court held that trustees of a trust could not be prosecuted vicariously under section 141 of the Negotiable Instruments Act, 1881, and proceedings against the non-signatory petitioners were set aside.

Ratio Decidendi: For the purpose of section 141 of the Negotiable Instruments Act, 1881, a trust does not constitute a body corporate or an association of individuals, and trustees who are not signatories to the cheque cannot be subjected to vicarious criminal liability merely by virtue of their office.

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