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

In brief

The question

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

The court held

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

It also directed

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

01Facts

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

p. 2, 4

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

p. 2

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

pp. 2-3

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

p. 2

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

p. 5

02Issues

i.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

p. 6, 9

ii.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

p. 5, 10

03Law 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

pp. 6-8

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

pp. 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

p. 10

Provisions in the judgment · 9 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 397 Section 401

Electricity Act, 2003 Section 135 Section 138 Section 149 Section 150

Drugs and Cosmetics Act, 1940 Section 34

Negotiable Instruments Act, 1881 Section 138 Section 141

04Reasoning

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

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

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

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

p. 10