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TMI Blog2024 (6) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... In the complaint, it is stated that the Accused No. 1, that is, Uniply Decor Ltd., had approached the respondent no. 2 for the purchase of industrial chemicals, namely Phenol, having represented their company to be in business of printing and service activities related to printing. 4. Based on such representation, the respondent no. 2 claims to have made supplies of the required goods to the company. The respondent no. 2 states that in discharge of the liability towards the amount outstanding in the books of account, a cheque bearing No. 001063 dated 10.07.2019 for a sum of Rs. 11,50,000/- drawn on HDFC Bank was issued by the Accused No. 1. However, on presentation, the same was returned as dishonoured with the remark "funds insufficient". As the payment was not made in spite of the legal notice, the respondent no. 2 filed the said complaint. 5. As far as the petitioner is concerned, the petitioner has been arrayed as Accused No. 6 in the complaint, with the following averments: "....Accused no. 6 (is the Chief Financial Officer of the Accused No. 1-Company, is the Authorised Signatory who has issued the cheque to the complainant who is and was in charge of and responsible to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly permits, or knowingly fails to take active steps to prevent, any default; (v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; (vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer." 10. Section 141 of the NI Act reads as under: "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 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the pre-requisites under the two parts of Section 141 of the NI Act for making persons liable to face prosecution under Section 138 of the NI Act, also held that a person who signs the cheque or who has the authority to sign the cheque for an on behalf of the company, regardless of his office or capacity, can, prima facie, be assumed to be in charge of and responsible to the company in the conduct of its business. I may quote from the judgment as under:- "26. By virtue of the provisions of sub-section (1) of Section 141, the guilt for the offence and the liability to be prosecuted and punished shall be extended to every person who, at the time the offence was committed, was in charge of and was responsible to the company for the conduct of its business; irrespective of whether such person is a director, manager, secretary or other officer of the company. It would be for such responsible person, in order to be exonerated in terms of the first proviso, to prove that the offence was committed without his knowledge or despite his due diligence. 27. Under the separate provision of sub-section (2), if it is proved that the offence was committed with the consent or connivance of or wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance or neglect and holding of the office by the accused. There is nothing to suggest that the same person cannot be made to face the prosecution either under sub-section (1) or sub-section (2) or both. 31. A Director or manager can be arraigned and proved to be guilty as the person in charge of and responsible to the company as well as the Director of the company who, as such, might have consented to, connived at or been negligent in respect of the offence of dishonour of cheque, be logically deduced that a person can be arraigned in a complaint as the accused along with the company if it prima facie appears that he was in charge of and responsible to the company for the conduct of its business, although he may or may not be or may not have continued to be a Director or other officer of the company, as mentioned in sub-section (2). It would be sufficient if the complaint indicates that such person has been arraigned on the basis of averments which disclose him or her to be the person in charge of and responsible to the company in the conduct of its business at the time the offence was committed. 32. Evidently, a person who signs the cheque or who has the authority to sign the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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