RAGHU LAKSHMINARAYANAN versus M/S. FINE TUBES

RAGHU LAKSHMINARAYANAN versus M/S. FINE TUBES

An employee of a proprietary concern cannot be proceeded against for dishonour of cheque under Section 141 of the Negotiable Instruments Act, as a proprietary concern is not a company or firm as envisaged by the Act; only the proprietor is responsible.

Parties
Appellant: Raghu Lakshminarayanan; Respondent: M/s Fine Tubes
Jurisdiction
India
Judgment Date
05 April 2007
Procedural Posture
Criminal Appeal / Appeal From High Court Judgment Under Section 482 Cr PC
Outcome
Appeal allowed
Legal Topics
Dishonour of Cheque, Vicarious Liability, Proprietorship Concern, Negotiable Instruments Act, 1881, Code of Criminal Procedure, 1973
Criminal Law Commercial Law Dishonour of Cheque Vicarious Liability Proprietorship Concern Negotiable Instruments Act, 1881 Code of Criminal Procedure, 1973

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Parties

Raghu Lakshminarayanan

Appellant

M/s Fine Tubes

Respondent

Procedural Posture

Criminal Appeal / Appeal From High Court Judgment Under Section 482 Cr PC

Legal Issues

  1. 1 Whether an employee of a proprietorship concern can be prosecuted under Section 141 of the Negotiable Instruments Act, 1881 for dishonour of cheque.
  2. 2 Whether a proprietary concern falls within the definition of 'company' as per Section 141 of the Negotiable Instruments Act, 1881.

Ratio Decidendi

An employee of a proprietary concern cannot be proceeded against for dishonour of cheque under Section 141 of the Negotiable Instruments Act, as a proprietary concern is not a company or firm as envisaged by the Act; only the proprietor is responsible.

Court Disposition

Appeal allowed

Orders

  • Impugned judgment set aside
  • Complaint case against the appellant is quashed