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TMI Blog2000 (11) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... n 138 of the Negotiable Instruments Act, 1881. According to the petitioner, the second accused Salim Pasha issued two cheques dated February 26, 1997, for ₹ 10,00,000 and June 14, 1997, for ₹ 20,00,000 towards the liability of the company towards bill discounting facilities given by the complainant to the accused. In the complaint, the complainant had stated that the cheques were issued by the second accused Salim Pasha in his capacity as managing director of the first accused company as per instructions of accused Nos. 3 to 8 herein, who are the directors and in charge of the day-to-day affairs of the first accused company. The petitioner herein is one of the directors of the company, who is arrayed as the sixth accused. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.--For the purposes of this section,-- (a) 'company' means any body corporate and includes a firm or other association of individuals ; and (b) 'director' in relation to a firm, means a partner in the firm." 4. A reading of the section would go to show that (i) the company is liable, (ii) the person who was (a) in charge, (b) responsible to the company, and (c) for the conduct of the business of the company, is liable ; and (iii) other officer of the company including director, manager, secretary or other offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sub-section (2) to Section 141 of the Negotiable Instruments Act widens the scope of the vicarious liability as it lays down that where it is proved that the offence by the company has been committed with the consent or connivance of or is attributable to, any neglect on the part of, any director, manager, secretary or other officer, shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. It would thus be clear that an offence under Section 138 of the Negotiable Instruments Act is committed by a company or a firm, every director of the company, every partner of the firm and every officer, etc., of the company or the firm shall be deemed to be guilty of the offence, provided a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that the director's were in charge of the company and also responsible to the company for the conduct of its business. 9. Learned counsel for the petitioner also cited another unreported judgment rendered by my learned brother A. Ramamurthi J. in Crl. O. P. No. 11316 of 1999 dated October 11, 1999, wherein the noble judge has considered how far the averment that the petitioner therein who was a director, "was in charge of and responsible to the company for the conduct of the business of the company" would clinch the issue. In that case, there was evidence to show that the director who sought to quash the proceeding on the ground that she was a resident of Nilgiris and the company was at Madras. It was held that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons (1) and (2) to Section 141 of the Negotiable Instruments Act has been expressed by the noble judge. The noble judge had stated that Sub-section (2) to Section 141 starts with the non obstante clause and under Sub-section (1) the persons in charge of and responsible to the company shall be deemed to be guilty of the offence. Under Sub-section (2) even persons who are not stated to be in charge of and responsible to the company can be prosecuted, if it is alleged and proved that the offence has been committed with the consent or connivance of or attributable to any neglect on the part of any of these persons prosecuted. No doubt, it is true that in the case of prosecution of persons under Sub-section (1) to Section 141(1), a presumption o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence was committed with the consent of the chairman, managing director and general manager respectively and the averments referring to their position and that they are responsible for failure to make payment of sums claimed under the notice and therefore are guilty of offence under Section 138 of the Negotiable Instruments Act, would be sufficient to bring their case within the fold of Section 141(2) of the Negotiable Instruments Act. 14. In the instant case, the complainant had stated in the complaint that the petitioner is a director in charge of the day-to-day affairs of the first accused company. This averment is sufficient to satisfy the provision of Section 141(1) of the Negotiable Instruments Act. I feel, it is not necessary that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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