Quashing of Section 138 complaint refused where firm liability and representative capacity could not be decided at the threshold.

In a complaint under Section 138 of the Negotiable Instruments Act, the High Court held that quashing was not warranted merely because the cheque was described as issued in the name of a firm and the firm was not initially arraigned as an accused. Section 141 creates vicarious liability for offences committed by a company, including a firm, only where the statutory requirements are satisfied, but that issue could not be finally determined at the threshold on the pleadings alone. The Court held that the accused's defence and the nature of the transaction could not be examined in inherent jurisdiction under Section 482 CrPC, and that the firm could be considered for impleadment during trial if evidence justified it.

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Issues: Whether the cognizance order and criminal proceedings in a complaint under Section 138 of the Negotiable Instruments Act, 1881 should be quashed on the ground that the cheque was said to have been issued in the name of a firm and the complaint did not initially array the firm as an accused.

Analysis: Section 141 of the Negotiable Instruments Act, 1881 creates vicarious liability only where the offence under Section 138 is committed by a company, which includes a firm, and where the statutory conditions are satisfied. The complaint contained averments that the cheque was issued by the petitioner, but the question whether the transaction was with the firm or whether the petitioner signed in a representative capacity could not be conclusively determined at the threshold. The Court also noted that, in appropriate circumstances, the firm could be added during trial by invoking Section 319 of the Code of Criminal Procedure, 1973 if evidence so justified. At the stage of exercising inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, the defence of the accused could not be examined or a merits inquiry undertaken.

Conclusion: The quashment request was not accepted and the cognizance order and further proceedings were upheld.

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