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TMI Blog2024 (5) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was in-charge of, and responsible for the conduct of the business of the company. The word in-charge of a business has been interpreted to mean a person having overall control of the day-to-day business of the company. In the ordinary course of business, it cannot be said that the petitioner, who was acting as a Company Secretary, would be in-charge of the day-to-day affairs of the company, as required in terms of Section 141(1). Thus, the petitioner cannot be vicariously liable in terms of Section 141(1). In view of the facts of the present case including the fact that the petitioner was employed as a Company Secretary in the accused company as well as the position of law w.r.t Section 141 NI Act and the application of the same to the subject complaints, it can be observed that the subject complaints are bereft of the adequate averments against the petitioner alleging the Petitioner s involvement in the conduct of the business of the Company beyond her statutory role as a Company Secretary, more particularly, in relation to the transaction pursuant to which cheque in question was issued. Neither, is there any averment that the offence has been committed with the consent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject cheques ) were issued during July-September, 2019. Upon presentation, the subject cheques were dishonoured and consequently, distinct demand notices qua each of the subject cheques were issued. Upon failure to repay the amount, the present criminal complaints came to be filed. 4. As per the material placed on record, the petitioner is sought to be made vicariously liable for the offence under Section 138 NI Act, by describing her as a Director of the accused company and that it was upon her assurance that the goods were provided. Further, she had also assured that the subject cheques would be duly encashed. Thus, upon their dishonour, the petitioner becomes vicariously liable in terms of Section 141 NI Act. 5. Learned counsel for the petitioner submits that the petitioner has been wrongly implicated in the present matters inasmuch as she was never a Director in the accused company. It has been stated that she had been appointed as a Company Secretary in the accused company w.e.f. 05.01.2019. Reference in this regard has been made to the letter of appointment dated 15.12.2017, letter of consent issued by the petitioner dated 30.12.2018, extract of the meeting of the Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal notice is concerned, it is stated that the demand notice had been duly served, which is evidenced from the postal documents. 9. Since the entire matter hinges on the aspect of vicarious liability of the petitioner in terms of Section 141 NI Act, it is deemed apposite that the same is reproduced for easy reference:- 141. Offences by companies. ( 1) If the person committing an offence under section 138 is a company, every person 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 and shall be liable to be proceeded against and punished accordingly (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, it can be culled out that the Company Secretary is a key managerial personnel who performs secretarial functions on behalf of the Company to ensure that the secretarial compliances are made by the Company. The statutory role that a Company Secretary performs does not include conducting the business of the Company of the kind envisaged in Section 141, for such an individual to be made vicariously liable. 13. A Coordinate Bench of this Court in Madan Aggarwal v. State 2006 SCC OnLine Del 121 observed that:- xxx 9 In my view, the role of the Company Secretary is distinguishable and he is a mere employee of the company. He was neither a Director nor signatory to the cheque. The duties of the Company Secretary are well defined. The Court in that matter opined that since employing Company Secretary is compulsory and he has mainly to act upon the policy and resolutions of the company he, therefore, has no active role regarding the demand of financial assistance and issue of cheque. I am also of the view that the Company Secretary has no active role in the passing of resolutions and the policy decisions of the company for seeking financial assistance or issuing cheques and he is rather ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d No. 6 in the subject complaints) has been impleaded based upon sweeping allegations and bald averments, stating therein that based upon the assurances provided by the accused persons, respondent supplied the goods as well as accepted the subject cheques in discharge of the liability. Even if the said averments are taken at their face value, they do not appear to be adequate inasmuch as these averments do not particularly address/show the consent/connivance/neglect on the part of the petitioner in issuance or dishonour of the cheque. 16. In S.P. Mani and Mohan Dairy v. Dr. Snehlatha Elangovan (2023) 10 SCC 685 , while dealing with the distinction between Section 141(1) and 141(2) as well as the requisite evidence in their regard, the Supreme Court observed:- xxx 28. While the essential element for implicating a person under sub-section (1) is his or her being in charge of and responsible to the company in the conduct of its business at the time of commission of the offence, the emphasis in sub-section (2) is upon the holding of an office and consent, connivance or negligence of such officer irrespective of his or her being or not being actually in charge of and responsible to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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