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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 ..... plaint only in his position as an agent or signatory of the cheque. Therefore, the provision of Section 28 of the NI Act would not have any application to the facts of the present case. Since the complaint satisfies the test of Section 141 of the NI Act and does not lay its foundation u/s 28 of the NI Act, the judgement of Sivagurunatha Pillai [ 1940 (12) TMI 33 - MADRAS HIGH COURT] , as referred to by the counsel for the petitioner, does not apply to the present case. The court found no merit in the petition and dismissed it, along with the application, as infructuous. The order clarified that it does not affect any defense the petitioner may present before the Trial Court. - HON BLE MR. JUSTICE NAVIN CHAWLA For the Petitioner Through: Mr. Manoj V George, Mr. K.M. Vignesh Ram, Ms. Akshita Agarwal, Advs. For the Respondents Through: Mr. Shoaib Haider, APP NAVIN CHAWLA, J. (ORAL) CRL.M.A. 16486/2024 (Exemption) 1. Allowed, subject to all just exceptions. CRL.M.C. 4342/2024 and CRL.M.A. 16485/2024 2. This petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (in short, Cr. P.C. ), praying for quashing of the Complaint, being CT Case No. 16005/2019, title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner. 8. The petitioner is the Chief Financial Officer of the Accused No. 1 company and is, therefore, its Key Managerial Personnel , as defined under Section 2 (51) (iv) of The Companies Act, 2013. Section 2 (51) of the Companies Act reads as under: 2 (51) key managerial personnel , in relation to a company, means (i) the Chief Executive Officer or the managing director or the manager; (ii) the company secretary; (iii) the whole-time director; (iv) the Chief Financial Officer; and (v) such other officer as may be prescribed. 9. The Key Managerial Personnel is also made an officer who is in default for the purpose of any provision of the Companies Act, 2013, and is liable for any penalty or punishment. Section 2 (60) of the Companies Act reads as under: 2 (60) officer who is in default , for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely: (i) whole-time director; (ii) key managerial personnel; (iii) where there is no key managerial personnel, such director or directors as spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 punished accordingly. Explanation . For the purposes of this section, (a) company means anybody corporate and includes a firm or other association of individuals; and (b) director , in relation to a firm, means a partner in the firm. 11. Section 141 of the NI Act has two parts; the first states that every person , who at the time the offence was committed, was in charge of and was responsible for the day-to-day affairs and conduct of the business of the Company, shall be deemed to be guilty of the offence , under Section 138 of the NI Act and liable to be proceeded against and punished accordingly, unless he can prove that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence; while the second part, under Sub-Section (2) of Section 141 of the NI Act, states that any director, manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime 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 company in the conduct of its business. Thus, the important and distinguishing feature in sub-section (1) is the control of a responsible person over the affairs of the company rather than his holding of an office or his designation, while the liability under sub-section (2) arises out of holding an office and consent, connivance or neglect. 29. While all the persons covered by sub-section (1) and sub-section (2) are liable to be proceeded against and also punished upon the proof of their being either in charge of and responsible to the company in the conduct of its business or of their holding of the office and having been guilty of consent, connivance or neglect in the matter of commission of the offence by the company, the person covered by sub-section (1) may, by virtue of the first proviso, escape only punishment if he proves that the offence was committed without his knowledge or despite his due diligence. 30. As for the requisite evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Director of the Company. It was clarified that for Director or an officer of the company who signed the cheque on behalf of the Company, there is no need to make specific averment that he was in charge of and was responsible to the Company; the very fact of his signing the cheque gives rise to his responsibility under sub-section (2) of Section 141 of the NI Act. 14. The same reasoning shall also apply in case of the Chief Financial Officer, especially where such Chief Financial Officer has also signed the cheque on behalf of the Company. 15. In the present case, the petitioner is the Chief Financial Officer, who, in terms of Section 2 (51) (iv) of the Companies Act, is a Key Managerial Personnel of the Accused No. 1 company. The petitioner is also the signatory to the cheque in question. In the complaint, it is also stated that the petitioner was in charge and responsible for the conduct of the business of the company at the relevant time. In my view, therefore, the complaint satisfies the test of Section 141 of the NI Act for arraying the petitioner as an accused. 16. The complaint does not lay its foundation under Section 28 of the NI Act to make the petitioner liable, but in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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