2018 (5) TMI 790 - HC - Indian Laws

Direction to call for the records - Dishonor of cheque - Section 138 of Negotiable Instruments Act - Held that - the petitioners though received the notice dated 27.12.2008 as is evidenced by the postal acknowledgments cards, did not issue any reply denying their liability - In the instant case, the complaint is very clear as to the role played by the 1st accused. The other allegations levelled by the petitioners are disputed facts. Inherent powers cannot be invoked to quash a complaint on a disputed questions of fact - petition dismissed.

Summary

Issues involved:
1. Quashing of proceedings under Section 482 of Cr.P.C in C.C.No.1090 of 2009.
2. Vicarious liability under Section 138 of Negotiable Instruments Act - Role of accused in company's business.
3. Interpretation of Section 141 of the Negotiable Instruments Act.

Detailed analysis:
1. The petitioners sought to quash the proceedings in C.C.No.1090 of 2009 under Section 482 of Cr.P.C. The respondent/complainant filed a complaint against the petitioners for an alleged offence under Section 138 of the Negotiable Instruments Act. The complaint stated that the accused issued cheques that were dishonored, leading to the complaint. The petitioners argued that the 1st petitioner did not issue the cheques and lacked authority to do so, questioning their liability in the absence of specific averments.

2. The primary submission by the petitioners' counsel focused on Section 141 of the Negotiable Instruments Act, which deals with vicarious liability. Citing the Supreme Court's judgment in S.M.S. Pharmaceuticals Limited Vs. Netta Bhallen, it was emphasized that necessary averments must be present in a complaint to subject a person to criminal liability. The complaint should clearly establish the individual's role and connection to the company to determine liability under Section 141.

3. The interpretation of Section 141 was further elucidated through legal precedents. Referring to cases like Pooja Ravinder Devidasani Vs. State of Maharashtra and National Small Industries Corporation Ltd. Vs. Harmeet Singh Paintal, the requirement for specific averments detailing the accused's responsibility in the company's affairs was highlighted. The judgment emphasized that mere designation as a director is insufficient to establish liability under Section 141.

4. In the present case, the complaint explicitly outlined the role of the 1st petitioner in the company's business activities. The court noted that disputed facts raised by the petitioners could not be a basis for quashing the complaint using inherent powers. Additionally, a previous petition under Section 482 Cr.P.C had been dismissed on its merits. Consequently, the court dismissed the current petition, affirming the clarity of the complaint regarding the accused's involvement and liability under Section 141 of the Negotiable Instruments Act.