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TMI Blog2010 (10) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... ality Industries Limited is also a Public Limited Company (hereinafter referred as debtor company) . The said Company received two inter corporate deposits of ₹ 25,00,000/-each, from the respondent Company on 7.8.1998 and on 24.9.1998. The said deposits were for 90 days, repayable with interest at 22% per annum. The deposits were renewed from time to time. The deposit dated 7.8.1998 was renewed upto 4.11.1999 and became due and payable on 2.2.2000. The deposit dated 24.9.1998 was renewed upto 18.12.1999 and became due and payable on 18.3.2000. 3. Two promissory notes were also executed, each for ₹ 26,05,780/-, thereby the said amount become legally enforceable debt. The debtor Company issued two post dated cheques drawn on Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Director of the Company. 4. The petitioner is not the signatory in the cheques. 5. Mr. K.S. Rajagopalan for Mr. M. Thiyagarajan, learned Counsel for the petitioner submitted that admittedly the cheques were post dated cheques and the petitioner was not the signatory for the cheques. The learned Counsel pointed out that the petitioner has resigned from the post of Director as early as 7.6.2000 and the cheques were presented only on 25.7.2000 and 26.7.2000, a month after the resignation. The learned Counsel pointed out that the petitioner is not liable as he was not the Director of the company and was in charge of the company. The learned Counsel relied on a decision reported in 2008 (3) SCC (Crl) 401 (DCM Financial Services Limited v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in-charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company.... 7. On the contrary, Mr. Suresh, the learned Counsel for the respondent submitted that the petitioner was also in-charge of the day today affairs of the company and the subsequent resignation will not absolve the liability of the petitioner. The learned Counsel pointed out that the petitioner was the Director when the amount was due and became payable as early as 2.2.2000 and 18.3.2000. The learned Counsel relied on a decision reported in 2007 3 CTC 495 (N. Rangachari v. Bharat Sanchar Nigam Ltd.), wherein the Apex Court held as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted both the cheques and both the cheques were dishonoured with Memorandum dated 25.7.2000 and 26.7.2000. The petitioner resigned on 7.6.2000 and the resignation was also accepted. 10. Section 141 of the Act reads as follows: 141. Offences by companies - (1) If the person committing an offence under Section 138 is a company, every person who, at the time of the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly; Provided that nothing contained in this Sub-section shall render any person liable to punishment if he proves that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. In (2008 (3) SCC (Crl) 401 (DCM Financial Services Limited v. J.S. Sareen And Anr.) it was held as follows: While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a Company. The key words which occur in the section are every person . These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words: Who, at the time the offence was committed, was in charge of, and was responsible to the Company for the conduct of the business of the Company, as well as the Company, shall be deemed to be guilty of the offence, etc. 13. It is well settled that the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany at this point of time alone are vicariously liable and the person who had resigned from the Directorship of the Company cannot be held responsible unless specific allegations are made that the said person was incharge of and responsible for the conduct of the business of the company even after resignation. In 2008 (3) SCC (Crl) 401 (DCM Financial Services Limited v. J.S. Sareen And Anr.) (cited supra) in a similar situation, it is held he had no say in the matter seeing that the cheque is honoured he could not ask the company to pay the amount . It is also pertinent to note that the petitioner was not the signatory of the cheques. Therefore, I am of the considered view that the petitioner cannot be held liable for the dishonour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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