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TMI Blog2024 (7) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... as been arrayed as an accused on the premise that she is the authorized signatory of the accused no. 1 and that she signed the Agreement between the Accused No. 1 and the respondent along with the accused no. 2. That itself is not sufficient to invoke the vicarious liability of offence under Section 138 of the NI Act, in terms of Section 141 of the NI Act, on the petitioner. The complaint against the petitioner cannot be sustained. Accordingly, the same is quashed as against the petitioner - Petition disposed off. - HON'BLE MR. JUSTICE NAVIN CHAWLA For the Petitioner : Mr. T. V. George, Adv For the Respondent : Mr.Vikas Kumar, Mr. Ayush Kapur, Advs ORDER NAVIN CHAWLA, J. (ORAL) 1. This petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (in short, Cr.P.C. ) seeking quashing of the complaint filed by the respondent herein under Section 138 of the Negotiable Instruments Act, 1881 (in short, NI Act ), being CC No.3635/2018, titled M/s National Industrial Corporation v. M/s Hillstar Distributors, as against the petitioner, who has been arrayed as accused no.3 in the said complaint. 2. The above complaint has been filed by the respondent impleading th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 and Accused No. 3 is also the Authorized Signatory of Accused No. 1. Therefore, the Accused Nos. 2 and 3 being part of the senior management of the Accused No. 1 are in-charge of the day to day business and operational affairs of the Accused No. 1 and hence are liable to pay any debt or amount legally payable by the Accused No. 1 and also to discharge the liabilities of the Accused No. 1. Xxxx 18. That the Accused No. 2 is the authorized signatory and Proprietor of the Accused No. 1 firm alongwith the Accused No. 3 authorized signatory of Accused No. 1, who are the persons responsible for the day to day affairs and other business operations of the Accused No. 1 at the time of commission of the offence and as such their liability is joint, several and co-extensive with the liability of the Accused No. 1. (Emphasis supplied) 4. The learned counsel for the petitioner submits that the petitioner is neither the proprietor nor the signatory of the cheque in question. He submits that in terms of Section 141 of the NI Act, it is only where the offence is committed by a company or a firm or other association of individuals, that the person, who is in-charge of or responsible for the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation. For the purposes of this section, debt of other liability means a legally enforceable debt or other liability. (Emphasis supplied) 8. A reading of the above provision would show that it makes only the drawer of the cheque liable for prosecution under the said Section. Reference in this regard can also be made to the judgment of the Supreme Court in Aparna A. Shah v. Sheth Developers (P) Ltd., (2013) 8 SCC 71. 9. Section 141 of the NI Act creates vicarious liability in case the offence under Section 138 of the NI Act has been committed by a company or by a firm or other association of individuals. It reads as under: 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 conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the complaint petition is absolutely vague. A juristic person can be a company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Partnership Act, 1932 or an association of persons which ordinarily would mean a body of persons which is not incorporated under any statute. A proprietary concern, however, stands absolutely on a different footing. A person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs. A proprietary concern is not a company. Company in terms of the Explanation appended to Section 141 of the Negotiable Instruments Act, means any body corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a company, incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Partnership Act. xxxxx 11. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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