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TMI Blog2021 (12) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... company at the time when the offence was committed , it is discernible that regardless of a guarantee deed being executed as part of the impugned transaction, no criminal liability would be attributable to a Director of the accused company who executed such deed if he resigned therefrom prior to the issuance of the cheques in question. The petitioner had executed personal guarantee deeds dated 17.05.2011 and 18.06.2013. As the aforementioned relied-upon documents indicate, he ceased to be associated with the accused company as a Director with effect from 28.02.2014, whereas the cheques in question were issued only thereafter, i.e., from 30.03.2014 to 31.01.2016. Admittedly, the cheques were signed by respondent No. 3, who, as per the averment made in the complaints, alone undertook that the same would be duly honoured upon presentation. Such an undertaking/assurance was not attributed to the present petitioner. In this backdrop, the execution of guarantee deeds by the petitioner at an earlier point in time would not attract vicarious liability under Sections 138/141 NI Act. Besides, there is nothing on record to indicate that the petitioner was in-charge of and responsible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Registrar of Companies. 5. It is also submitted that the only specific role assigned to the present petitioner is that at earlier point of time, he had executed personal guarantee deeds dated 17.05.2011 and 18.06.2013 in favour of the complainant company. However, after he resigned from the accused company on 28.02.2014, he had no role to play. In simple words, the petitioner s case is that on the date of the alleged offence being committed, he was not incharge of the day-to-day affairs of the accused company. 6. Learned counsel for respondent No. 1/company (hereinafter referred to as the complainant company ), on the other hand, has supported the impugned orders. He submits that specific averments against the petitioner are evident in the complaints filed by the complainant company, wherein it is stated that the petitioner was a Director of the accused company and had executed a guarantee deed, thereby undertaking personal liability. It is also submitted that the proceedings before the Trial Court are at the nascent stage and may not be quashed at the outset. 7. I have heard learned counsels for the parties and have also gone through the material placed on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable. 12. To make a Director of a company vicariously liable under Section 141 NI Act, specific allegations have to be made out against him in the complaint. In National Small Industries Corporation Limited v. Harmeet Singh Paintal and Another reported as (2010) 3 SCC 330, the Supreme Court has enunciated the law on the subject as follows:- 13. Section 141 is a penal provision creating vicarious liability, and which, as per settled law, must be strictly construed. It is therefore, not sufficient to make a bald cursory statement in a complaint that the Director (arrayed as an accused) is in charge of and responsible to the company for the conduct of the business of the company without anything more as to the role of the Director. But the complaint should spell out as to how and in what manner Respondent 1 was in charge of or was responsible to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. 14. A company may have a number of Directors and to make any or all the Directors as accused in a complaint merely on the basis of a statement tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in these proceedings. (emphasis added) 15. It is also deemed apposite to refer to the decision recently rendered by the Supreme Court in Ashutosh Ashok Parasrampuriya and Another v. Gharrkul Industries Pvt. Ltd. and Others reported as 2021 SCC OnLine SC 915, where the circumstances under which a case under Sections 138/141 NI Act may be quashed by this Court, in exercise of powers under Section 482 Cr.P.C., were enunciated as follows:- 23. In the light of the ratio in S.M.S. Pharmaceuticals Ltd. (supra) and later judgments of which a reference has been made what is to be looked into is whether in the complaint, in addition to asserting that the appellants are the Directors of the Company and they are incharge of and responsible to the Company for the conduct of the business of the Company and if statutory compliance of Section 141 of the NI Act has been made, it may not open for the High Court to interfere under Section 482 CrPC unless it comes across some unimpeachable, incontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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