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TMI Blog2016 (3) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... the NI Act without joining the partnership firm stands quashed and set aside. However, it will be open for the respondent no.1 to move the Court of competent jurisdiction for appropriate relief with a petition under section 14 of the Limitation Act seeking exclusion of the period during which he was prosecuting this case. - CRIMINAL WRIT PETITION NO. 2909, 2910, 2914, 2915 OF 2013 - - - Dated:- 29-1-2016 - DR. SHALINI PHANSALKARJOSHI, J. For The Petitoner : Mr. P.H. Naik i/b Mr. Sachin R. Pawar For The Respondent : Mr. Mr. Amrut Joshi with Mr. Rushabh Seth i/b M.S. Bodhanwalla and Co., Mr. Deepak Thakare, A.P.P. JUDGMENT: In all these four writ petitions, the parties are one and same and they raise a common question of law as to whether a prosectuion launched under section 138 of the Negotiable Instruments Act ( NI Act for short) against a partner alone without joining the partnership firm can be maintainable. Hence, they are being decided by this common judgment. 2. By these petitions, the original accused is challenging the order dated 23rd July 2013 in Criminal Revision Petition No.7 of 2012 passed by the learned Additional Sessions Judge, Mangaon, Dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be stated that though several grounds are raised in the petition challenging the order of issue of process, at the time of advancing the submissions before this Court, learned counsel for the petitioner has fairly conceded that he is challenging the order only on one count, i.e. not joining the partnership firm of the petitioner in the proceedings launched against the petitioner. It is submitted that undisputedly the transaction was entered into by respondent no.1 company with the petitioner's firm. However, the petitioner's firm is not joined as party to the complaint. The petitioner alone is sued in his capacity as a partner, without joining even the other partners of the partnership firm. According to learned counsel for the petitioner, therefore, the very complaint filed before the Trial Court is not at all maintainable in view of the settled position of law that the company is an essential party to the proceedings initiated under section 138 read with section 141 of the NI Act. 5. In support of his submissions, learned counsel for the petitioner has relied upon the legal position as laid down by the Apex Court in the case of Aneeta Hada vs. Godfather Travels To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. In my considered view, in order to appreciate the rival submissions of the petitioner and respondent no.1, it would be useful to reproduce section 141 of the NI Act. 141. Offences by companies.(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this subsection shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. Notwithstanding an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant. 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words as well as the company appearing in the Section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanwanti Devi, (1996) 6 SCC 44 and Oriental Insurance Co. Ltd. vs. Raj Kumari Ors., AIR 2008 SC 403, which elaborate the circumstances when a judgment can be said to be a binding precedent. 12. There can hardly be any two opinions that every judgment must be read as applicable to particular facts provided and secondly circumstantial flexibility, i.e. one additional or different fact, can make a world of difference between the conclusions in two cases. It is also equally true that the judgment in Aneeta Hada (supra) does not consider the legal realm of the partnership firm which does not have independent legal existence. 13. However, in my considered opinion, the conclusions drawn by the Apex Court in the case of Aneeta Hada (supra) are not based merely on the fact that the company is a separate legal entity and juristic person, but these conclusions are drawn on the basis of the fact that section 141 of the NI Act deals with vicarious liability. In paras 58 and 59 of the said judgment, referred above, the Apex Court has referred to the wording in section 141 of the NI Act and observed that commission of offence by a company is an express condition precedent to attract vicar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making applicable the law laid down by the Apex Court in Aneeta Hada (supra) to the partnership firm merely because in that judgment the Apex Court was considering the eventuality of nonjoining of the company. The basic premise of holding either the director or the partner liable for prosecution being the same that of the vicarious liability. Therefore, once the company is held to be essential party and that arraigning of a company as an accused is imperative for prosecution under section 141 of the NI Act, it necessarily follows that arraigning of a partnership firm is also imperative for prosecution against the partners under section 141 of the NI Act. The prosecution launched against only one of the partners of the partnership firm, without joining the partnership firm, cannot be maintainable and on this very ground, the process issued against the petitioner is liable to be quashed and set aside. 17. In this view of the matter, I am also supported by the judgment of the Delhi High Court in Vijay Power Generators Ltd. vs. Sumit Seth, 2014 All M.R. (Cri.) Journal 305, wherein also it has been held that unless the partnership firm is prosecuted and convicted, the partner thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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