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2024 (5) TMI 121 - HC - Indian Laws


Issues Involved:
1. Quashing of criminal complaints u/s 138 read with Section 141 of the Negotiable Instruments Act.
2. Vicarious liability of the petitioner u/s 141 NI Act.
3. Role and liability of a Company Secretary in the context of Section 141 NI Act.

Summary:

Issue 1: Quashing of criminal complaints u/s 138 read with Section 141 of the Negotiable Instruments Act

By way of present petitions filed u/s 482 Cr.P.C., the petitioner seeks quashing of criminal complaints instituted u/s 138 read with Section 141 of the Negotiable Instruments Act as well as the summoning order dated 28.01.2020 passed in all these criminal complaints.

Issue 2: Vicarious liability of the petitioner u/s 141 NI Act

The petitioner is sought to be made vicariously liable for the offence u/s 138 NI Act, by describing her as a Director of the accused company and that it was upon her assurance that the goods were provided. However, the petitioner contends that she was never a Director but a Company Secretary in the accused company and had resigned from the position vide letter dated 14.10.2019.

Learned counsel for the respondent argues that the necessary averments have been made against the petitioner in the complaints, stating that she had assured the payment and encashment of the cheques. However, the Court notes that the complaints do not specifically aver that the petitioner was in charge of, and responsible for the conduct of the business of the company as required u/s 141(1) NI Act.

Issue 3: Role and liability of a Company Secretary in the context of Section 141 NI Act

The Court discusses the statutory role of a Company Secretary as defined u/s 2(24) of the Companies Act, 2013, and concludes that the role does not include "conducting the business of the Company" of the kind envisaged in Section 141. A Coordinate Bench in Madan Aggarwal v. State observed that a Company Secretary is a mere employee and not in charge of the day-to-day affairs of the company.

The Court further references S.P. Mani and Mohan Dairy v. Dr. Snehlatha Elangovan, noting that liability u/s 141(2) requires specific allegations of consent, connivance, or neglect, which are absent in the present complaints.

Conclusion:

The Court concludes that the subject complaints are bereft of adequate averments against the petitioner alleging her involvement in the conduct of the business of the Company beyond her statutory role as a Company Secretary. Consequently, the petitions are allowed, and the criminal complaints filed u/s 138 read with Section 141 NI Act are quashed qua the petitioner. The summoning orders dated 28.01.2020 are also set aside.

 

 

 

 

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