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TMI Blog2022 (3) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant establishes that the applicant was a nominee Director and who has now resigned - thus, it is clear that in absence of specific allegations about the applicant he can not be prosecuted for any offence under section 138 N.I. Act. The learned Magistrate has failed to consider the matter properly. The order of summoning regarding applicant is unjust and illegal and can not be sustained. Application allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, Noida and on presentation for payment the same has been dishonored on 16th July, 2013 with the remarks "Exceeds Arrangement". The complainant issued legal notice dated 24.7.2013 by Registered A.D. post demanding payment of the amount due under the said two cheques. The notices have been served on all the accused on 29.7.2013. Despite receipt of the legal notice they failed to pay the amount of the dishonored cheques within the stipulated time of 15 days. On the aforesaid complaint the learned Magistrate by the impugned order dated 7.1.2014 has summoned the applicant and other accused named in the complaint to face trial for the offence under section 138 N.I. Act. Aggrieved with the aforesaid summoning order the applicant filed a criminal revision no. 72 of 2019 which has been dismissed by Special Judge SC/ST Act vide judgment and order dated 2.1.2021. The contentions of the learned counsel for the applicant are that the impugned order of summoning is a non speaking order. The learned Magistrate has not taken notice of the fact that there was no specific averment in the complaint against the applicant. He also contended that applicant was only a nominee Director appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed on merits. The learned revisional court did not find any merit in it. Learned counsel also contended that the complaint was filed in the year 2014 and is lingering before the trial court since then. Only the applicant has put his appearance before the trial court. None of the remaining accused has appeared. He submitted that a direction be issued to the trial court to ensure the presence of the other accused persons and decide the case expeditiously. It transpires from the material on record that applicant has been arrayed as an accused in the complaint being a Director of the company. In para no. 4 of the complaint there are general allegations that the accused no. 1 is also public limited company incorporated under the Companies Act having its registered address at "Techpro Towers" Plot No. 11-A 17, 5th Cross Road, SIPCOT IT Park, Siruseri, Chennai and other accused are Directors/Executive Directors of the company/accused no. 1 and are responsible for the acts and deeds of the company/accused no. 1. In S.M.S. Pharmaceuticals Ltd. Vs. Neta Bhalla and another (2005) 8 Supreme Court Cases 89 the reference was made by a two judges bench for determination of the following qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctions are result of acts of others. Therefore, officers of a Company who are responsible for acts done in the name of the Company are sought to be made personally liable for acts which result in criminal action being taken against the Company. It makes every person who, at the time the offence was committed, was in charge of, and was responsible to the Company for the conduct of business of the Company, as well as the Company, liable for the offence. The proviso to the sub-section contains an escape route for persons who are able to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence. (8) The officers responsible for conducting affairs of companies are generally referred to as Directors, Managers, Secretaries, Managing Directors etc. What is required to be considered is: is it sufficient to simply state in a complaint that a particular person was a director of the Company at the time the offence was committed and nothing more is required to be said? For this, it may be worthwhile to notice the role of a director in a company. The word 'director' is defined in Section 2 (13) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in a complaint. When the requirement in Section 141, which extends the liability to officers of a company, is that such a person should be in charge of and responsible to the company for conduct of business of the company, how can a person be subjected to liability of criminal prosecution without it being averred in the complaint that he satisfies those requirements ? Not every person connected with a Company is made liable under Section 141. Liability is cast on persons who may have something to do with the transaction complained of. A person who is in charge of and responsible for conduct of business of a Company would naturally know why the cheque in question was issued and why it got dishonoured." Thereafter the Hon'ble Apex Court answered the questions in para 19 which is reproduced as below: "In view of the above discussion, our answers to the questions posed in the Reference are as under: (a) It is necessary to specifically aver in a complaint under Section 141 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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