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Issues Involved:
1. Whether the allegations in the complaint were sufficient to summon the respondents 2 and 3 under Section 138 of the Negotiable Instruments Act. 2. Interpretation and application of Section 141 of the Negotiable Instruments Act regarding the liability of directors and officers of a company. 3. Legal precedents and their applicability to the case at hand. Issue-wise Detailed Analysis: 1. Sufficiency of Allegations in the Complaint: The primary issue was whether the complaint contained sufficient allegations to summon respondents 2 and 3 for the dishonour of cheques under Section 138 of the Negotiable Instruments Act. The complaints alleged that the respondents, who were the Chairman and Vice Chairman of M/s Dalmia Industries Ltd., were responsible for the conduct of the company's business and liable for the dishonoured cheques. The Metropolitan Magistrate had recalled the summons issued to respondents 2 and 3, maintaining the summons against other directors. The complainant contended that there was no legal requirement to assign specific roles to the respondents and that the general allegations were sufficient for summoning them. 2. Interpretation and Application of Section 141 of the Negotiable Instruments Act: Section 141 of the Act was pivotal in determining the liability of directors and officers for offences committed by a company. The section stipulates that every person in charge of and responsible for the conduct of the company's business at the time of the offence is deemed guilty. However, the court highlighted that mere designation as a director, chairman, or vice chairman does not automatically make one liable under Section 138. The Supreme Court precedents, particularly in the cases of Katta Sujatha and Ashok Leyland, emphasized that specific allegations showing how the directors were responsible for the conduct of the business or how they connived in the offence are necessary. 3. Legal Precedents and Their Applicability: The court referred to several Supreme Court judgments to elucidate the requirements under Section 141: - Ashok Leyland Finance Ltd. v. R.S. Aggarwal and Ors.: It was established that not all directors are liable for offences under Section 138; specific involvement in the conduct of the business must be shown. - Katta Sujatha v. Fertilizers and Chemicals Travancore Ltd.: This case underscored that a director must have a specific role in the business conduct or connivance in the offence to be liable. - S.V. Mazumdar and Ors. v. Gujarat State Fertilizers Co. Ltd.: The court noted that specific allegations against directors were crucial and upheld the sufficiency of such allegations in the context of Section 141. The court concluded that the allegations in the complaint were insufficient to summon respondents 2 and 3. There were no specific averments detailing their involvement in the conduct of the business or their connivance in the offence. The Metropolitan Magistrate's decision to recall the summons was upheld. However, the court clarified that this order does not preclude the possibility of summoning the respondents at a later stage if sufficient evidence is produced under Section 319 of the Code of Criminal Procedure. Conclusion: The petitions were dismissed on the grounds that the complaints lacked specific allegations against respondents 2 and 3. The court emphasized the necessity of detailed and specific allegations to hold directors and officers liable under Section 138 and 141 of the Negotiable Instruments Act. The decision reinforced the legal principle that mere designation as a director or officer does not suffice for criminal liability without specific involvement or connivance in the offence.
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