Complaint for Cheque Dishonour under S.138 of Negotiable Instruments Act, 1881 Quashed by High Court
The case of Rajiv Gupta v. State of UP [2026] GCtR 209 (Lucknow, Allahabad) has discussed the issues related to S.138 of Negotiable Instruments Act, 1881. In this case complaint against accused [who was Director of Company] was quashed.
Corporate Criminal Liability
It was held that there is no trace of doubt that the company is a juristic person. The concept of corporate criminal liability is attracted to a corporation or company and it is so luminescent from the language employed under Section 141 of the Act. A plain reading of Section 138 read with Section 141 of the N.I. Act would indicate that if a person who commits offence under Section 138 of the Act is a company, the company as well as every person in charge of and responsible to the company for the conduct of business of the company at the time of commission of offence is deemed to be guilty of the offence.
Conditions for Fastening Vicarious Liability
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 compalint and proof thereof.
Maintainability of Complaint
Unless the company is made a party, no vicarious liability can be imposed on the Managing Director and the complaint cannot proceed.
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