TaxTMI 
TaxTMI 
2022 (3) TMI 924
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....d seeking to quash the proceedings in C.C.No.118 of 2014 which stood pending on the file of the Court of Judicial Magistrate of First Class at Huzurnagar, Nalgonda District. The petitioners who are arrayed as Accused Nos.1 & 3 in the said Calendar Case have approached this Court. 4. A perusal of the record reveals that the 2nd respondent filed a complaint contending that the petitioners herein and another who is arrayed as Accused No.2, committed an offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short 'the N.I.Act'). The said complaint was taken on file against all the three accused. Aggrieved by the act of taking cognizance, the petitioners/Accused Nos.1 & 3 are before this Court. 5. Thus, in the light ....
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....d in their individual capacity and indeed as the partners of the firm, their responsibility is collective and therefore, they were arrayed as accused. Learned counsel further contended that the Calendar Case was taken on file and summons were issued in the year 2014, but immediately, the petitioners approached this Court and obtained stay of all further proceedings and therefore, the proceedings were stalled putting the 2nd respondent to huge loss and indeed there were series of transactions between the petitioners firm and the 2nd respondent and during the business transactions, for the goods purchased, the petitioners firm issued several cheques, but most of them got returned due to insufficiency of funds, thereby causing loss to the busi....
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....00/-, cheque bearing No.073055 for an amount of Rs. 5,00,000/- and the cheque bearing No.073056 for an amount of Rs. 5,00,000/- were returned with an endorsement "funds insufficient" and on that as required under law, notice was issued. But the amounts were not paid and thus, the Accused committed offence punishable under Section 138 of N.I.Act. 10. Submitting that as the petitioners i.e., the Accused Nos.1 & 3 were not dealing with the 2nd respondent and they have not issued the cheques and are not signatories to those cheques, they cannot be roped with the liability. Learned counsel for the petitioners, relied upon the decisions of the Hon'ble Apex Court in Aneeta Hada Vs Godfather Travels and Tours Private Limited (2012) 5 Supreme Cou....
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....ake the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary ....
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....irm shall be opened in the name of the firm and shall be operated by the signature of Second Partner. 8. The firm may borrow money from banks, financial institutions or other parties with or without pledging, charging or hypothecating the assets of the partnership and the borrowing powers shall be exercised by the joint signature of the all partners." 13. Nowhere, it is contended that the alleged cheques which were dishonoured were not issued by the petitioners firm. The only contention of the petitioners is that as they have not issued the alleged cheques, they cannot be held liable vicariously. The well established principle of criminal law is that there is no vicarious liability for the criminal offence, unless the sta....
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....ent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation- For the purposes of this section,- (a) "company" means anybody corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm. 15. Thus, it is clear that every person responsible for the conduct of business of the company as well as the company shall be deemed to be guilty of the offence punishable under Section 138 of N....