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TMI Blog2023 (11) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... d (P) Ltd. Her company borrowed business loan of Rs.25 lakhs from the complainant Bank and agreed to repay the loan in equated monthly instalment. The Managing Director of the Company Mr.Kalyankumar and this petitioner as a Director given personal guarantee for the repayment. To discharge the loan the company issued cheque dated 23/05/2018 for Rs.25,68,310/- signed by the Managing Director of the company Mr.Kalyankumar. The cheque was presented for collection on 23/05/2018, but returned with endorsement " Payment Stopped by drawer". The statutory notice dated 06/06/2018 was sent to; (i) M/s Gevika Agro Food (P) Ltd; (ii) its managing director Mr. Kalayakumar /the signatory of the cheque; and (iii) the Director, Mrs. Ravathy (the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed guarantee letter for prompt repayment of the loan. To discharge the loan the subject cheque signed by the Second accused was issued. The accused had instructed their bank to stop payment. In the complaint at paragraph (6) it is averred that the 2nd and 3rd accused being the Directors of the first accused company are responsible to the conduct of the business and as under Section 141 of Negotiable Instruments Act, 1881 deemed to be guilty of the offence. 7. In Ashoke Mal Bafna -vs- Upper India Steel Manufacturing and Engineering Company Limited reported in [(2018) 14 SCC 202], the Hon'ble Supreme Court had held as below:- "9. To fasten vicarious liability under Section 141 of the Act on a person, the law is well settled by this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the statement filed by the defaulter Company on 20-2-2006 with the Registrar of Companies that in an advertisement of the Company seeking deposits (Annexure P-3), only the names of three Directors of the Company were shown as involved in the working of the Company and the name of the appellant was not therein. Indisputably, therefore, the cheques bounced on 24-8-2006 due to insufficient funds were neither issued by the appellant nor the appellant was involved in the day-to-day affairs of the Company." 8. In State of NCT of Delhi through Prosecuting Officer, Insecticides, Government of NCT, Delhi -vs- Rajiv Khurana, reported in [(2010)11 SCC 469], which relates to the complaint filed by the Prosecuting Officer, Insecticides under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the complaint, the respondent cannot be compelled to face the rigmarole of a criminal trial." 9. In Ashok Shewarkramani and others -vs- State of Andhra Pradesh and another, reported in [(2023)8 SCC 473], the Hon'ble Apex Court while quashing the complaint under Section 138 of Negotiable Instruments Act, 1881 against the Directors, who were not whole time Directors and not signatories to the cheque had held that, "9. Sub-section (1) of Section 141 of the NI Act required the complainant to aver that the present appellants at the time of the commission of the offence were in charge of, and were responsible to the Company for the conduct of the business of the Company. In the present case, all that the second respondent has alleged i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner that she was not a whole time director or ex officio Director of the company. Her claim is that she is not involved in the day to day affairs of the company and in the complaint there is no specific averment that she is involved in the day to day affairs of the company. 12. Mere extracting the expression used in Section will not satisfy the requirement to hold a director vicariously liable for the offence under Section 138 of Negotiable Instruments Act, 1881. The averment of the complaint must satisfy the test, whether there are averments to prima facie satisfy the Court taking cognizance that the person deemed to be guilty of offence have role in the conduct of the business and in charge of the company. As far as the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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