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TMI Blog2024 (7) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... of the day-to-day business of the company. Thus, for a Director to be vicariously liable, the complainant has to show that the said Director was indeed associated with the day-to-day affairs and management of the business. A Director cannot be arrayed as an accused on the basis of a cursory statement or vague averment. What would be appropriate pleadings/averments would be determined on a case-to-case basis. The petitioner has denied liability by arguing that the complaint is bereft of the necessary averments against the petitioner, to bring her into the net of Section 141 NI Act. However, upon a reading of the criminal complaint placed on record, this Court is of the considered opinion that the complaint contains the necessary averments in line with Section 141 NI Act inasmuch as it has been stated that the petitioner alongwith the other Directors was jointly and severally responsible and in-charge for the conduct of the business as well as in control of the management of the affairs of the accused company. Petition dismissed. - HON'BLE MR. JUSTICE MANOJ KUMAR OHRI For the Petitioner : Mr. Rajat Nair , Mr. Manan Popli , Ms. Paruni Sharma , Mr. Gaurav Jain , Ms. Karuna Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held liable with the aid of Section 141 of the NI Act. Lastly, it is contended that the petitioner had resigned from the Directorship of the company with effect from 06.03.2020 and in this regard, a communication addressed to the Board of Directors has been placed on record. 4. The law as regards the liability of a Director for an offence under Section 138 NI Act committed by a company is no longer res integra. In S.M.S Pharmaceuticals Ltd. v. Neeta Bhalla Anr. (2005) 8 SCC 89 , the Supreme Court while dealing with the aforesaid, discussed in detail the role of a Director in a company as well as their liability. The relevant extract of the said judgement reads as under:- xxx 8. The officers responsible for conducting the affairs of companies are generally referred to as directors, managers, secretaries, managing directors, etc. What is required to be considered is: Is it sufficient to simply state in a complaint that a particular person was a director of the company at the time the offence was committed and nothing more is required to be said. For this, it may be worthwhile to notice the role of a director in a company. The word director is defined in Section 2(13) of the Companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable. xxx 5. The said dicta of Supreme Court continue to form the bedrock for the principles surrounding vicarious liability of Directors under Section 138 read with Section 141 NI Act and has been reiterated with approval in a number of judgements including but not limited to S.M.S. Pharmaceuticals v. Neeta Bhalla Anr. (II) (2007) 4 SCC 70 , K.K. Ahuja v. V.K. Vora (2009) 10 SCC 48 , Pooja Ravinder Devidasani v. State of Maharashtra Anr. (2014) 16 SCC 1 , Gunmala Sales Pvt. Ltd. v. Anu Mehta Anr. (2015) 1 SCC 103 , Standard Chartered Bank v. State of Maharashtra (2016) 6 SCC 62 , Ashok Mal Bafna v. Upper India Steel Manufacturing and Engineering Co. Ltd. (2018) 14 SCC 202 , Ashutosh Ashok Parasrampuriya v. Gharrkul Industries Pvt. Ltd. Ors. 2021 SCC OnLine SC 915 , and most recently in Susela Padmawathy Amma v. Bharti Airtel Ltd. 2024 SCC OnLine SC 311. What arises from the conspectus of decisions provided above is that while a Director of a company indeed holds a sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 138 NI Act against the Directors in exercise of the powers conferred under Section 482 Cr.P.C. is concerned, the same has been discussed in detail by the Supreme Court in Sunita Palita v. Panchami Stone Quarry (2022) 10 SCC 152 and S.P. Mani Mohan Dairy v. Snehalatha Elangovan (2023) 10 SCC 685 . In S.P. Mani (Supra), it has been observed:- xxx 58. Our final conclusions may be summarised as under: 58.1. The primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable On the other hand, the first proviso to sub-section (1) of Section 141 of the Act clearly lays down that if the accused is able to prove to the satisfaction of the Court that the offence was committed without his/her knowledge or he/she had exercised due diligence to prevent the commission of such offence, he/she will not be liable of punishment. 58.2. The complainant is supposed to know only generally as to who were in charge of the affairs of the company or firm, as the case may be. The other administrative matters would be within the special knowledge of the company or the firm and those who are in charge of it. In such circumstances, the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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