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2022 (6) TMI 1130 - HC - Indian Laws


Issues Involved:
1. Quashing of the order dated 3.3.2018 under Section 319 CrPC.
2. Liability under Section 138 of the Negotiable Instruments Act.
3. Vicarious liability under Section 141 of the Negotiable Instruments Act.

Issue-wise Detailed Analysis:

1. Quashing of the order dated 3.3.2018 under Section 319 CrPC:

The petitioners sought to quash the order dated 3.3.2018, which allowed the application under Section 319 CrPC to array them as accused in a case filed under Section 138 of the Negotiable Instruments Act. The court noted that Section 319 CrPC allows the court to proceed against any person not being the accused if it appears from the evidence that such a person has committed any offence. However, the court found that there was no material available to conclude that the petitioners had committed the offence under Section 138 of the Act. The court emphasized that there were no allegations in the complaint that the loan was advanced to the firm or other partners, only to the accused Rishi Rana. Thus, the order to array the petitioners as accused was quashed.

2. Liability under Section 138 of the Negotiable Instruments Act:

The complaint was filed under Section 138 of the Act due to the dishonor of a cheque issued by the accused Rishi Rana. The petitioners argued that they were not liable as there were no allegations that the loan was advanced to them or the firm. The court agreed, noting that the complaint specifically stated that the loan was given to Rishi Rana for his domestic use. The mere fact that the petitioners signed the cheque was not sufficient to establish their complicity, especially in the absence of any allegations that the loan was given to the firm or the petitioners.

3. Vicarious liability under Section 141 of the Negotiable Instruments Act:

The court referred to the principles established by the Hon'ble Apex Court regarding vicarious liability under Section 141 of the Act. It was emphasized that to fasten vicarious liability, the complainant must specifically show how and in what manner the accused was responsible for the conduct of the business. The court cited the case of Ashoke Mal Bafna v. Upper India Steel Mfg. & Engg. Co. Ltd., which held that the Magistrate must examine the nature of allegations and evidence before summoning an accused under Section 138 of the Act. The court found that there were no specific averments against the petitioners showing their responsibility for the conduct of the business or the issuance of the cheque. Therefore, the petitioners could not be held vicariously liable.

Conclusion:

The court concluded that the petitioners could not be held liable under Section 138 of the Act as there were no specific allegations against them regarding the loan or the issuance of the cheque. The order dated 3.3.2018 was quashed, and the petition was allowed, disposing of all pending applications.

 

 

 

 

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