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TMI Blog2013 (5) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the aforesaid legal pronouncements, Managing Director and the Joint Managing Director are deemed to be vicariously liable for the offence committed by the company because of the position they hold in the company. Problem arises in cases where all the persons holding office in the company are sought to be prosecuted by the complainant, irrespective of whether they played any specific role in the incriminating act. One can also not lose sight of the fact that once such innocent persons are summoned, they have no choice but to seek bail and face the ordeal of trial. Many of such persons also approach the High Court under Section 482 Cr.P.C. to seek quashing of the summoning order and the complaint filed against them and this further increases the burden on the already overburdened Courts. Therefore, With a view to ensure that the Metropolitan Magistrates dealing with the complaint cases filed under Section 138 r/w Section 141 of the Negotiable Instruments Act have a clear and complete picture of the persons arrayed by the complainant so as to hold them vicariously liable for the commission of the offence by the accused company, court is inclined to direct that the Magistrates mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above, learned counsel for the petitioner submits that the legal position is now well settled that the liability for an offence punishable under Section 138 r/w Section 141 of the Negotiable Instruments Act, 1881 will not arise by merely stating that the accused person holds some designation in the accused company or by merely reproducing the language of Section 141 of the Act in the complaint. The complainant has to make a specific averment in the complaint as to how and in what manner the person accused of the offence under Section 138 of the Negotiable Instruments Act, 1881 was responsible or had a role in the conduct of the business of the accused company at the relevant time. A mere fact that the accused person was a Director or was holding some other office in the company cannot make a person vicariously liable to face the prosecution as per the mandate of Section 141 of the Negotiable Instruments Act, 1881. 4. I have heard the learned counsel for the petitioner. 5. Chapter XVII was incorporated in the Negotiable Instruments Act, 1881 by the Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1998 with effect from 1.4.1989 for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c)the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in the petition containing that accused were in-charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv)Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi)If accused is a Director or an Officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint. (vii) The person sought to be made liable should be incharge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases. 8. The recent judgments of the Apex Court namely, Anita Malhotra v. Apparel export Promotion Council and Anr., (2011) 1 SCC 520 and Laxmi Dyechem v. State of Gujrat and Ors., 2012 (11) SCALE 365, have again reiterated the said legal position. 9. The prime objective of this Court is to remind all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the offence by the accused company, I am inclined to direct that the Magistrates must seek copies of Form-32 from the complainant to prima facie satisfy the Court as to who were the directors of the accused company at the time of commission of the alleged offence and on the date of filing of the complaint case. In addition to the above, the Magistrates must also seek information as given in the following table which is to be annexed by the Complainant on a separate sheet accompanying the complaint:- a. Name of the accused Company; b. Particulars of the dishonoured cheque/cheques; * Person/Company in whose favour the cheque/cheques were issued * Drawer of the cheque/cheques * Date of issuance of cheque/cheques * Name of the drawer bank, its location * Name of the drawee bank, its location * Cheque No. /Nos. * Signatory of the cheque/cheques c. Reasons due to which the cheque/cheques were dishonoured; d. Name and Designation of the persons sought to be vicariously liable for the commission of the offence by the accused Company and their exact role as to how and in what manner they were responsible for the commission of the alleged offence; e. Particul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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