2017 (12) TMI 391 - HC - Indian Laws

Dishnour of cheque - cognizance under Section 138 of NI Act - Held that - The averments of the complaint do not disclose about any specific allegation about the role played by the respondent to project that he was also instrumental for issuance of cheque. Predominately the allegations have been attributed against the company itself alone to isolation to others. Therefore, prima facie reading of the complaint do not specify the fact that the pleadings have been made to bring the case within Section 141 of the Act, 1881 which justify the issuance of process by the JMFC to one of the accused named in company. It is not stated that who was in hold of the reins of the company to issue the cheque and whether the respondent was responsible to issue said cheque on behalf of the company or not. On the contrary, the allegations of issuance of cheque is attributed to the company alone. Thus when it is not averred in complaint that the respondent was responsible for the business of the company and has issued the cheque for and on behalf of the company the complaint against him cannot be sustained. The complaint only purports that the money was invested in the company at the instance of the respondent for return of inflated healthy sum. The complaint is silent about the role of respondent and responsibility for issuance of cheque on behalf of the company. Therefore, in case of dishonour of any cheque issued by the company the liability cannot be fastened under Section 138 of the Act, 1881 to the respondent vicariously.

Summary

Issues involved:
Challenge to revisional order setting aside cognizance under Section 138 of the Negotiable Instrument Act, 1881 based on lack of specific averments against the accused.

Detailed Analysis:

1. Revisional Order Challenge:
The petition challenges a revisional order setting aside the cognizance under Section 138 of the Negotiable Instrument Act, 1881. The complaint was filed against several accused, including one who filed the revision, arguing that no specific averments were made against him regarding his responsibility for issuing the dishonored cheque. The petitioner contends that the revisional Court erred in quashing the complaint at an early stage without a trial to determine the accused's role in the issuance of the cheque.

2. Averments in Complaint:
The complaint under Section 138 of the Act named three accused, including the respondent who filed the revision. The complaint did not specifically attribute responsibility to the respondent for issuing the cheque on behalf of the company. The Supreme Court precedent emphasizes the necessity of specific averments in complaints to establish vicarious liability under Section 141 of the Act, which was lacking in this case. The complaint primarily focused on the company's liability, with insufficient details implicating the individual accused.

3. Legal Precedents:
The judgment references legal precedents such as S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Aneeta Hada Vs. Godfather Travels and Tours Private Limited to highlight the importance of clearly outlining the accused's role and responsibility in complaints involving vicarious liability. The Court reiterated that mere directorship in a company is insufficient to establish liability under Section 141, emphasizing the need for specific averments regarding the accused's involvement in the company's affairs.

4. Dismissal of Petition:
Based on the lack of specific averments in the complaint against the respondent regarding his responsibility for the dishonored cheque, the Court dismissed the petition. The Court found that the complaint failed to establish the respondent's direct involvement in issuing the cheque on behalf of the company, thereby concluding that vicarious liability under Section 138 of the Act could not be imposed on the respondent. Consequently, the revisional order was upheld, and the petition was dismissed for lack of merit.

In conclusion, the judgment underscores the significance of detailing specific averments in complaints to establish vicarious liability under the Negotiable Instrument Act, 1881. The Court's decision to dismiss the petition was based on the insufficiency of allegations against the accused individual, highlighting the need for clear attribution of responsibility in such cases to warrant legal action.