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Prakash Yedhula (Lawyer)     14 November 2009

SC judgment on Vicarious Liability in 138 cases

K.K. AHUJA Vs. V.K. VORA & ANR.

Negotiable Instruments Act, 1881: ss.141(1) and (2), 138 - Vicarious liability - Liability of Deputy General Manager of the Company which issued the dishonoured cheque - Held: A person is vicariously liable under sub- section (1) of s.141, if he is responsible to the company for the conduct of the business of the company and was also incharge of business of the company - Sub-section (2) of s.141 provides that Director, Manager, Secretary or other officer though not in charge of conduct of the company would be liable if offence was committed in connivance or consent or was a result of negligence on his part - Deputy General Manager is not a person responsible to the company for conduct of business of company -  Question whether he was incharge of the business of the company or not becomes irrelevant Thus, he cannot be made vicariously liable under s.141(1) - To make him liable under s.141(2), necessary averments relating to sent/connivance/negligence should be made - Since no such averments were made in the complaint, there was no error in the order quashing the summons against him - Companies Act, s.291 - Interpretation of statutes - Liability - Vicarious liability - Code of Criminal Procedure, 1973 - s.482.Interpretation of statutes: Strict interpretation - Penal statutes - Held:" To be construed strictly - Penal statutes providing constructive vicarious liability to be construed much more strictly - Negotiable Instruments Act, 1881 - s.138.

The appellant filed a complaint under s.138 of Negotiable Instruments Act, 1881 against a company and eight others including the first respondent. The Magistrate directed issue of summons against all the accused persons. The first respondent filed petitions for quashing the proceedings against him on the ground that he was only a Deputy General Manager who was not in- charge of the company.

The High Court quashed the orders summoning the  respondent holding that he was not a signatory to the cheques nor was a party to the decision to allow the cheques to be dishonoured. Aggrieved appellant filed these appeals.



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 10 Replies

Ajay Bansal (Advocate)     22 November 2009

As per my view, The High Court has given a correct judgement.

varadhaking (practising lawyer)     22 November 2009

Deputy Gen. Manager who is not responsible for the day to day affairs of the company can't be vaicorusly held. The Hon'ble High Court order is absolutly correct.

Adinath@Avinash Patil (advocate)     25 November 2009

Good judgment

Poonam Upadhyay pathak (Advocate)     25 November 2009

Good Judgement.

Sujit Lal (Advocate)     21 December 2009

In my opinion Hon'ble Supreme Court has pronounced a land mark judgement.

RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA)     24 December 2009

Thanx 4 dis helpfull judgment

ghansham das (self employed engineer)     12 January 2010

Dear all,

Every one will say I was not responsible/ aware/ in charge/,,, in the toilet.../ filed 32 form?? so on...

One company will keep a manager who will keep going to courts. , takes on bails/ and punishment by juduicary to complainant??

bcoz  the money does not belongs to judges/ courts/ no harm for giving any left or right / or worng orders?

 whos faults its?  pls comment.

if pssible.

When judgesa re not of full proof good conduct what way judiciary can be good??

Death of a person/ student/ suicide/ casual comment/  is a charm for a leader to show his dirty teeth on thro TV channels?

good news for channels/ every one keep watching/ what is govt. and hwerre is govt. /??

its is not a shame full game of democracy>>???

 

 

V.Senguttuvan (Advocate / Mediator & Concilator)     13 January 2010

 Certainly this is a landmark judgement.

ghansham das (self employed engineer)     19 January 2010

Dear all experts,

Pls define the definition of day to day responsible/ responsibility.

employ a person, keep rolling the creditors/ with the unsung - unwanted judiciary interferences/ is it ok.

is the way the 226/227 constitution will safe guards the interst of the public & its their rights??

pls answer.

thanks

Nitin (Law Officer)     06 August 2013

But what happen if due to inadvertent, complaint left to aver the specific role of the director in his complaint..?


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