2007 (11) TMI 711 - HC - Indian Laws

Summary

Issues Involved:
1. Quashing of criminal complaint u/s 482 CrPC.
2. Liability of Directors u/s 138 and 141 of the Negotiable Instruments Act.

Summary:

Issue 1: Quashing of criminal complaint u/s 482 CrPC

The petitioners sought to quash criminal complaint No. 1962/01 pending before the Metropolitan Magistrate, arguing that there was no material on record to connect them with the alleged offence u/s 138 read with Section 141 of the Negotiable Instruments Act. They contended that the complaint lacked averments that the petitioners were in charge of and responsible for the day-to-day affairs of the accused company. The petitioners also argued that they were not the authorized signatories of the company and were merely sleeping Directors.

Issue 2: Liability of Directors u/s 138 and 141 of the Negotiable Instruments Act

The court referred to several judgments, including *N.K. Wahi v. Shekhar Singh and Ors.*, which clarified that u/s 141 of the Act, only those persons who were in charge of and responsible for the conduct of the business of the company at the time the offence was committed could be held liable. The court emphasized that merely being a Director is not sufficient to attract liability u/s 141. There must be specific allegations in the complaint detailing the role of the Directors in the transaction.

The complaint in the present case contained specific averments that the petitioners were in charge of and responsible for the conduct of the business of the accused company and that the offence u/s 138 was committed with their knowledge, consent, and connivance. The court noted that these averments were sufficient to proceed with the trial and that the question of whether the petitioners were actually in charge of the affairs of the company could only be determined during the trial.

In light of the decision in *N. Rangachari v. Bharat Sanchar Nigam Limited*, the court concluded that the petitioners' arguments could only be addressed after the trial. Therefore, the petition to quash the complaint was dismissed with a cost of Rs. 5,000/- to be deposited with the trial court within one month, failing which the trial court would recover the same in accordance with the law.