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2019 (4) TMI 791 - HC - Indian LawsDishonor of Cheque - section 138 of the Negotiable Instruments Act, 1881 - acts of commission or omission - vicarious liability under Section 141 of the Negotiable Instruments Act, 1881 - Held that - Petitioner was also unable to clarify as to whether there has been a cessation in the responsibility of the petitioner in the capacity of Chairman-cum-Managing Director at any point of time over the period and, if so, from what specific date. The averments of the petitioner in these matters are indeed vague and nonspecific. Merely because the petitioner has been accepted as an NRI by the income tax authorities does not mean that there would be no occasion for him to participate in or being responsible for the day-to-day affairs of the company accused, particularly around the period to which the issuance of cheques, their dishonor and failure to pay pursuant to the demand notices relates. The petitioner, at best, raises question of facts which cannot be effectively addressed or determined in the jurisdiction under Section 482 of the Code of Criminal Procedure, 1973. His contentions raise defences which will have to be considered on the basis of evidence led before the trial court. Phese petitions are dismissed with costs of ₹ 20,000/- each.
Issues:
Petitioner's liability under section 138 of the Negotiable Instruments Act, 1881 based on vicarious liability and non-resident Indian (NRI) status. Analysis: The judgment arises from six criminal complaints alleging offenses under section 138 of the Negotiable Instruments Act, 1881. The complaints were against the petitioner and a company, both accused of dishonoring cheques totaling ?6 crores and 30 lacs. The petitioner was accused based on vicarious liability due to his role in the company's day-to-day affairs. The Metropolitan Magistrate found grounds to proceed against the petitioner, leading to the impugned orders. The petitioner, claiming NRI status and non-involvement in the company's affairs, argued against vicarious liability under Section 141 of the Act. He cited an income tax assessment order and board meeting minutes to support his position. However, the respondent countered, alleging the petitioner's active role in the company's management, despite the absence of a rejoinder from the petitioner. During the hearing, evidence presented by the complainant, including board meeting minutes and reports to the registrar of companies, indicated the petitioner's significant involvement as Chairman-cum-Managing Director with the largest stake in the company. The petitioner's counsel failed to refute this evidence or specify any cessation in his responsibilities over time, leading to the court deeming his contentions vague and nonspecific. The court dismissed the petitions, emphasizing that the petitioner's factual contentions should be addressed during trial rather than under Section 482 of the Criminal Procedure Code. The judgment highlighted that the petitioner's defenses and factual disputes require evidence in the trial court, resulting in the dismissal of the petitions with costs imposed on the petitioner.
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