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TMI Blog2017 (3) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... & Haryana in Criminal Miscellaneous No. M-35870 of 2010 (O&M) by which the High Court dismissed the appellant's petition for quashing the Complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act') read with Section 420 of the Indian Penal Code. 3. The brief history of the case as per the complaint is that the accused/appellant issued nine cheques on 6-7-2006 in favour of the complainant Company for Rs. 8,00,000/- each, and one other cheque for Rs. 9,40,780.05 in discharge of legal liability of M/S Coventry Spring and Engineering Company Ltd. (for short 'the defaulter Company') of which the appellant was a Director. When the cheques were presented for clearance, they were dishonoured by the bank with remarks " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er after his resignation and were dishonoured on 24-08-2006 against which the legal notice dated 6-9-2006 was served and subsequently the complaint in question has been filed. Learned counsel further argued that since the bounced cheques were not actually issued by the appellant, nor he was holding the post of Director at that point of time and he has nothing to do with that transaction therefore he is not liable. Simply for the reason that at one point of time, the appellant had played some role in the activities of the defaulter Company as a Director would not bind him to the constructive liability under Section 141 of the Act. In support of his argument, learned counsel relied on a decision of this Court in DCM Financial Services Ltd. Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laneous application filed by the appellant seeking quashing of the criminal proceedings? 7. Before delving into the issue further, it would be apt to look into the principles of law settled by this Court on the subject. 8. In Girdhari Lal Gupta Vs. D.H. Mehta & Anr. (1971) 3 SCC 189, this Court observed that a person 'in charge of a business' means that the person should be in overall control of the day to day business of the Company. 9. Interpreting the provisions of Section 141 this Court in National Small Industries Corporation Vs. Harmeet Singh Paintal & Anr. (2010) 3 SCC 330 observed that Section 141 is a penal provision creating vicarious liability, and which, as per settled law, must be strictly construed. It is therefore, not suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for the conduct of the business of the Company. 12. Turning to the case on hand, admittedly the cheques dated 28-12-2004 were issued while the appellant was Director of the Company with validity for a period of six months but during that period they were not presented for realization at the bank. The appellant has resigned as Director w.e.f. 2-1-2006 and the fact of his resignation has been furnished by Form 32 to the Registrar of Companies on 24-03-2006 in conformity with the rules. Thereafter, the appellant had played no role in the activities of the default Company. This fact remains substantiated with the Statement filed by the default Company on 20-02-2006 with the Registrar of Companies that in an advertisement of the Company see ..... X X X X Extracts X X X X X X X X Extracts X X X X
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