SANKAR PADAM THAPA v. VIJAYKUMAR DINESHCHANDRA AGARWAL
Supreme Court of India
2025 INSC 1210
Discusses interpretation of statutes, vicarious liability, binding precedent, and the legal status of trusts.
Legal Discussion:
- Negotiable Instruments Act, 1881: The judgment extensively discusses Section 138, concerning dishonour of cheques, and Section 141, dealing with offences by companies. The core issue revolves around whether a complaint under the NI Act is maintainable against a trustee when a cheque issued on behalf of a trust is dishonoured, without the trust itself being named as an accused. The judgment analyzes the explanation to Section 141, particularly the phrase "association of individuals," and whether a trust falls within its ambit. It examines various High Court decisions interpreting these sections, including whether a trust is a juristic person capable of being prosecuted under Section 138. The court ultimately concludes that a complaint is maintainable against the trustee who signed the cheque, even without arraying the trust as an accused. It also discusses the necessary averments in a complaint under Section 141 to establish vicarious liability, referencing the SMS Pharmaceuticals Ltd. case. The judgment overrules the views expressed in several High Court decisions that equated a trust with a company for the purposes of Section 141.
- Indian Penal Code, 1860: The judgment mentions Section 420 IPC in passing, noting that the respondent was also charged under this section in the original complaint. However, there is no detailed discussion or analysis of Section 420 itself.
- Code of Criminal Procedure, 1973: Section 482 CrPC is mentioned in the context of the Respondent filing a criminal petition before the High Court seeking to quash the complaint case. The judgment notes that the High Court quashed the complaint case using its powers under Section 482. The judgment also references that if any Director wants the process to be quashed by filing a petition under Section 482 of the Code.
- Indian Trusts Act, 1882: The judgment refers to the Indian Trusts Act, 1882, defining a trust as an obligation and not a legal entity. It quotes Sections 3 and 13 of the Act, emphasizing that the obligation to maintain and defend suits lies with the trustee, not the trust itself. Section 3 defines "Trust" and Section 13 outlines the trustee's duty to protect trust property. The judgment uses these sections to support its view that a trust does not have a separate legal existence and cannot sue or be sued independently.
- Consumer Protection Act, 1986: The judgment discusses the Consumer Protection Act, 1986, in the context of whether a trust can be considered a "person" and therefore a "consumer" under the Act. It refers to the Pratibha Pratisthan case, where it was held that a trust is not a "person" and cannot file a consumer dispute. The judgment cites Section 2(1)(m) of the Consumer Protection Act, which defines "person," and notes that a trust does not fall within this definition.
- General Principles of Law: The judgment touches upon the principle of ejusdem generis in interpreting the phrase "association of individuals" in Section 141 of the NI Act. It also discusses the doctrine of binding precedent and the hierarchy of courts, emphasizing that a later bench of equal strength cannot refuse to follow an earlier decision. The judgment also mentions the principle that every judgment must be read as applicable to the particular facts proved or assumed to be proved. The judgment also discusses the principle of per incuriam and sub-silentio.
List of Laws: Negotiable Instruments Act, 1881; Indian Penal Code, 1860; Code of Criminal Procedure, 1973; Indian Trusts Act, 1882; Consumer Protection Act, 1986; General Principles of Law