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Sign up now !Dilip Hiraramani vs Bank Of Baroda
2022 SCC OnLine SC 579
Coram: Hon’ble Justice Ajay Rastogi, Hon’ble Justice Sanjiv Khanna
Forum: Hon’ble Supreme Court of India
Case No.: Criminal Appeal No. 767 OF 2022
Date of Decision: May 09, 2022
Conclusion
Facts and Procedural Background:
- Dilip Hariramani (Appellant), a partner in the partnership firm M/s. Global Packaging.
- Bank of Baroda (Respondent) provided loans and cash credit facilities to M/s. Global Packaging.
- The Respondent bank filed the case under Section 138 of the Negotiable Instruments Act, 1881, against the Appellant and Simaiya Hariramani (Partner of the Firm M/s Global) because the firm dishonoured three cheques issued by the firm, each for Rs. 25,00,000, as partial repayment of the loan.
- The Respondent filed a complaint before the Judicial Magistrate First Class, Balodabazar, Chhattisgarh, resulting in the conviction of Dilip Hariramani and Simaiya Hariramani, sentencing them to 6 months imprisonment and imposing a fine.
- Aggrieved by the decision of the judicial magistrate, first class Appellant and Simaiya Hariramani filed an appeal before the appellate court. The conviction was upheld, but the sentence was modified to imprisonment till the rising of the court with increased compensation of Rs. 1,20,00,000.
- The Appellant and Simaiya Hariramani challenged the appellate court decision before the High Court but was dismissed, stating in Monaben Ketanbhai Shah and Another v. State of Gujarat and Others (2004) 7 SCC 15, noting that liability under the NI Act applies only to partners responsible for managing the firm’s business. In this case, both the appellant and Simaiya Hariramani had provided guarantees for the amount borrowed by the firm from the bank.
- Hence, the appeal was filed.
Main issue:
Whether a partner can be held vicariously liable and convicted under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 when the partnership firm itself is not named or tried as an accused?
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