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TMI Blog2022 (1) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... aking a Director of a company liable for the offences committed by the company under Section 141 of the N.I. Act, there must be an averment in the complaint that he was in-charge of and responsible to the accused company for running of its day-to-day business at the time of commission of the alleged offence - the N.I. Act being a penal statute should receive strict construction and thus, averments in the complaint which satisfy the requirements of Section 141 N.I. Act are imperative. The fact that respondent No. 2 is a Director of the accused company is also not disputed. The petitioner has also placed on record balance sheets of the accused company for the relevant years, which indicate that the same were signed by respondent No. 2 in the capacity of Director. In this backdrop, what role, if any, was played by respondent No. 2 at the time when the offence was committed shall be a matter of trial and may be discerned by the concerned Court once both parties have led evidence - In the opinion of this Court, no ground for quashing of the summoning order qua respondent No. 2 is made out, as the case is at nascent stage. Considering the facts thereof, requirements of Section 141 N.I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Trial Court. It is further contended that the Revisional Court has failed to appreciate that necessary averments were made in the complaint against respondent No. 2 by stating that she was one of the Directors in the accused company and that she was responsible for the day-to-day affairs of the company. Learned counsel has also placed reliance upon the balance sheets of the accused company for the relevant years, which were signed by respondent No. 2 in the capacity of Director, along with her husband/co-accused, to submit that she was in-charge of and responsible for conduct of the business of the accused company. 4. Learned counsel for respondent No. 2, on the other hand, has supported the impugned order. She submits that no specific averments have been made in the complaint regarding the role of respondent No. 2 in the affairs of the accused company and/or the transaction in question. She further submits that respondent No. 2, albeit a Director of the accused company, was not involved in its financial affairs and did not sign the cheques in question. Thus, no liability under Sections 138/141 N.I. Act could be attributed to her merely on account of the position held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Sales Private Limited v. Anu Mehta and Others reported as (2015) 1 SCC 103 , where the Supreme Court was concerned with the law on prosecution of a Director under Sections 138/141 N.I. Act, when it outlined that it is necessary for prosecution under these Sections that an averment is made to the effect that the accused Director was in-charge of or responsible for the conduct of the affairs of the accused company. It was further held that if an accused seeks quashing of the criminal complaint on the ground that only bald averments have been made, they must lead some evidence of incontrovertible nature in support of the contention. The law surrounding liability of a Director who was not the signatory of the cheque in dispute was also discussed in this case in the following terms: 27. It is clear from a perusal of the above decisions that SMS Pharma (1), which is a three-judge Bench decision, still holds the field. In all subsequent decisions, two-judge Benches of this Court have followed SMS Pharma (1) 28. We are concerned in this case with Directors who are not signatories to the cheques. So far as Directors who are not signatories to the cheques or who are not Manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be quashed for the asking. For quashing of a complaint it must be shown that no offence is made out at all against the Director. (emphasis added) 11. On an overview of the judicial dicta on the subject, this Court is of the opinion that the N.I. Act being a penal statute should receive strict construction and thus, averments in the complaint which satisfy the requirements of Section 141 N.I. Act are imperative. 12. Before proceeding to the facts of the present case, it is worthwhile also to reproduce the view taken recently in Sunil Todi and Others v. State of Gujarat and Another reported as 2021 SCC OnLine SC 1174, wherein the Supreme Court was in seisin of appeals preferred by accused/appellants against the order of the High Court, whereby petitions seeking quashing of criminal complaints filed under Section 138 N.I. Act were dismissed. The Court observed thus:- 53. The test to determine if the Managing Director or a Director must be charged for the offence committed by the Company is to determine if the conditions in Section 141 of the NI Act have been fulfilled i.e., whether the individual was in-charge of and responsible for the affairs of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o respondent No. 2 as well, no reply was furnished on her behalf to the effect that she was not in-charge of or responsible to the accused company for the conduct of its business at the relevant time. The fact that respondent No. 2 is a Director of the accused company is also not disputed. The petitioner has also placed on record balance sheets of the accused company for the relevant years, which indicate that the same were signed by respondent No. 2 in the capacity of Director. In this backdrop, what role, if any, was played by respondent No. 2 at the time when the offence was committed shall be a matter of trial and may be discerned by the concerned Court once both parties have led evidence. 15. In the opinion of this Court, no ground for quashing of the summoning order qua respondent No. 2 is made out, as the case is at nascent stage. Considering the facts thereof, requirements of Section 141 N.I. Act are prima facie satisfied. The Magistrate having exercised his discretion, this Court finds no reason to substitute its opinion in place thereof. 16. In view of the above facts and circumstances and the exposition of law as outlined hereinabove, this Court finds infirmity in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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