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2007 (5) TMI 651 - HC - Indian Laws

Issues:
The judgment involves quashing of complaints u/s 211 and Section 293(1)(a) r/w. Section 629-A of the Companies Act, 1956 against the applicant.

Issue 1: Allegations against the Applicant
The applicant challenged the complaints on the grounds that his name was not specifically connected to the alleged offences and no specific allegations were made linking him to the day-to-day administration of the Company. The applicant argued that without such averments, he could not be held liable for the offences.

Issue 2: Legal Precedents
The applicant relied on legal precedents, including the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, which emphasized the necessity of averring that the accused was in charge of and responsible for the conduct of the business of the Company at the time of the offence. The court highlighted the importance of such averments for establishing liability under Section 141 of the Negotiable Instruments Act, 1881.

Issue 3: Director's Liability
The respondents contended that as the applicant was the Director of the Company, he was automatically responsible for the conduct of the business, thus making him liable for the offences. However, the court noted that mere directorship does not automatically establish liability under Section 141, emphasizing the need for specific averments regarding the accused's role in the Company's business.

Judgment
After examining the complaints and legal arguments, the court found that there were no averments indicating that the applicant was in charge of or responsible for the Company's business. As per Section 141 of the Negotiable Instruments Act, criminal liability arises only if the accused was in charge of and responsible for the business at the time of the offence. Since such allegations were lacking, the court quashed the complaints against the applicant u/s 482 of the Code of Criminal Procedure, while allowing proceedings against other accused persons to continue.

 

 

 

 

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