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TMI Blog2021 (12) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... filed Form-32 wherein A1 was shown as the Managing Director of the company, one Srikanth Akkina S/o. Venkata Raju Akkina as Director and the name of A2 as one of the Director and A4 as Additional Director. The cheque filed by the petitioner would disclose that it was issued by A1 in the capacity of the Managing Director of A5 company. Thus, the complaint or the documents filed would not disclose that the petitioner was neither the Director of the company nor issued the cheque on behalf of A5 - The name of the petitioner was not found anywhere in the said bond. Nowhere in the complaint, it was mentioned that the petitioner was responsible for the affairs of the company or that he issued the cheque. The Hon'ble Apex Court in National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tware Engineer and SAP Program Consultant. On 25.11.2010, A1 being the Managing Director of M/s. Serene Global Services (A5), while appreciating the ability of the complainant, entered into a service agreement and appointed him as Associated Software Engineer on an annual remuneration of ₹ 2,16,000/- along with other perks. While appointing the complainant, A1 imposed a condition to execute a Service Agreement Bond of ₹ 2,00,000/- with a condition that the complainant would be provided training to get SAP certification and would also be given annual CTC pay of ₹ 2,16,000/-. As per the service agreement, the complainant paid the said deposit of ₹ 2,00,000/- through demand draft bearing No. 674627 dated 24.10.2010 dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability of the cheque amount, the complainant filed the complaint. 3. Heard the learned counsel for the petitioner. There is no representation by the learned counsel for the 1st respondent - complainant. 4. The learned counsel for the petitioner submitted that the petitioner was neither a Director nor drawer of the cheque to initiate proceedings against him under Section 138 of the NI Act. There was no averment in the complaint as to the role of the petitioner except describing him as a Director. The learned Magistrate could not take cognizance of the offences under Section 138 of the NI Act unless the ingredients of Section 141 and 142 of the NI Act and the averments that the liability of the person in the transaction was made out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner was not found anywhere in the said bond. Nowhere in the complaint, it was mentioned that the petitioner was responsible for the affairs of the company or that he issued the cheque. The Hon'ble Apex Court in National Small Industries Corporation Limited case (supra) held that not every person connected with the company, but only those in-charge of and responsible for conduct of business of the company at the time of commission of offence were vicariously liable. It was further held: It is very clear from Section 141 of the Act that what is required is that the person who is sought to be made vicariously liable for a criminal offence under Section 141 should be, at the time the offence was committed, in charge of, and responsible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal liability, there is no presumption that every Director knows about the transaction. Vicarious liability on the part of a person must be pleaded and not inferred. 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. A company, though a legal entity, can act only through its Board of Directors. The settled position is that a Managing Director is prima facie in-charge of and responsible for the company's business and affairs and can be prosecuted for offences by the company. But insofar as other Directors are concerned, they can be prosecuted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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