Gujarat High Court

### Vicarious liability cannot be fastened upon partners without specific averments of active involvement in business conduct.

NISHITH MAGANLAL PATEL (petition disposed of as not pressed) vs STATE OF GUJARAT

Gujarat High CourtJUDGMENT: May 01, 20262 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The applicants were identified as partners of "Anand Textile Printers" and "Polite Processors." On 16.04.2010, PGVCL raided the units and seized two electric meters alleging theft via external devices

Source reference: p. 2, 4

Two FIRs were registered under Section 135 of the Electricity Act, 2003

Source reference: p. 2

The applicants sought discharge on grounds that the bill amounts were settled and they had no active role in the units’ functioning

Source reference: p. 2-3

The Special Court rejected the discharge applications on 17.05.2013, leading to the present revisions

Source reference: p. 2

Applicant No. 1 (Nishith Patel) expired during the pendency of these proceedings, causing the case to abate against him

Source reference: p. 5
02

Issues

1. Whether partners of a firm can be held vicariously liable for criminal offences under the Electricity Act, 2003, in the absence of specific averments regarding their active role in the conduct of business

Source reference: p. 6, 9

2. Whether the criminal proceedings are maintainable when the inspection record indicates the entity was a sole proprietorship managed by a deceased accused, rather than a partnership

Source reference: p. 5, 10
03

Law Applied

Section 149 of the Electricity Act, 2003, which governs offences by companies (including firms) and mirrors the principles of vicarious liability found in Section 141 of the Negotiable Instruments Act, Section 14A of the EPF Act, and Section 34 of the Drugs and Cosmetics Act

Source reference: p. 6-8

The precedent of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla regarding the necessity of specific pleadings for vicarious liability

Source reference: p. 9-10

Tamil Nadu Electricity Board v. Rasipuram Textiles (P) Ltd., which establishes that a director/partner must be shown to be in charge of and responsible for the conduct of business at the time of the offence

Source reference: p. 10
04

Reasoning

The court reasoned that criminal liability cannot be fastened upon partners solely by virtue of their designation

Source reference: p. 9

Upon perusal of the record, the court found that the inspection "Rojkam" only bore the signature of Applicant No. 1 in his capacity as "proprietor," and no documentary evidence supported the existence of a partnership or the involvement of the other applicants at the time of the raid

Source reference: p. 5

Under Section 149, a partner is only liable if they were responsible for the day-to-day business or if the offence occurred with their consent/neglect

Source reference: p. 6, 9

Since the prosecution failed to provide material evidence of active participation or specific roles for the remaining applicants, and because the primary accused (the proprietor) had expired and the civil liability (bills) had been discharged, continuing the prosecution would be an error of law

Source reference: p. 10
05

Holding

Mere status as a partner is insufficient for criminal prosecution under Section 149 of the Electricity Act without specific evidence of management

The High Court quashed and set aside the judgment/orders dated 17.05.2013 passed by the Additional Sessions Judge, Jetpur, and quashed FIR C.R. Nos. 1039 and 1041 of 2010 registered with GUVNL Police Station qua the applicants

Source reference: p. 10-11
Gujarat High Court

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NISHITH MAGANLAL PATEL (petition disposed of as not pressed)vsSTATE OF GUJARAT

Gujarat High Court · May 01, 2026

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