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TMI Blog2017 (10) TMI 1659X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company and may be held to be an 'officer in default', where under the provisions of the Companies Act, an officer is liable for the payment of time or penalty for breaches committed by the company. Vicarious liability in respect of an offence under Section 138 of the Negotiable Instruments Act however is to be determined in terms of the deeming provision engrafted in Section 141 of the Negotiable Instruments Act. The deeming clauses, inter alia, fixes vicarious liability on such officers of the company who were in-charge of and responsible to the company for the running of its day-to-day business at the time of commission of offence. Merely because a person was a whole time, director of the company, no statutory presumption cannot be made under Section 141 of the Negotiable Instruments Act that he is incharge of the affairs of the company. The contentions of the learned counsel for the opposite party No. 2 cannot be accepted that merely because the petitioners were directors/additional directors of the company it has to be inferred that they were in-charge of the affairs of the company. It is also pertinent to note that specific overt ai ts of the petitioners have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime, whole-time and additional directors of the said company, 3. Petitioners argues that the requisite averments to implicate the petitioners vicariously is not disclosed in the petition of complaint. Reliance has been placed in Tamil Nadu News Print Papers Ltd. v. D. Karunakar Ors, 2015 (4) JCC [NI] 286 : (2016) 6 SCC 78, SMS Pharmaceuticals Ltd. v. Neeta Bhalla 2005 (3) JCC [NI] 203 : (2005) 8 SCC 89 and K.K. Ahuja v. V.K. Vora Anr. 2009 (3) JCC [NI] 194 : (2009) 10 SCC 48 in support of such contention. 4. On the other hand, learned counsel appearing for the opposite party No. 2 submits that the petitioners were described by the offices they held in the corporate hierarchy and it has been categorically averred that they were responsible and liable for the day-to-day business of the accused No. 1'-company. Reference was also made to Sections 2(51) and 2(60) of the Companies Act to emphasize that a 'whole-time director' is always in-charge of the affairs of a company. 5. For better appreciation of the aforesaid controversy a reiteration of the relevant averment in the petition of complaint is apposite. 3. That the accused No. 1 is the Limited Company Under Companies Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141. 8. Similar view has been expressed in K.K. Ahuja v. V.K. fora Anr. 2009 (3) JCC [NI] 194 : (2009) 10 SCC 48 wherein that Court, inter alia, laid:- 27. The position under Section 141 of the Act can be summarised thus: (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix Managing to the word Director makes it clear that they were in charge of and are responsible to the company, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified; (iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorities, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; (v) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries who are not in charge of the business of the company at all. The meaning of the words person in charge of the business of the company was considered by this Court in Girdhari Lal Gupta v. D.H. Mehta followed in State of Karnataka v. Pratap Chand and Katta Sujatha v. Fertilizers Chemicals Travancore Ltd. This Court held that the words refer to a person who is in overall control of the day to-day business of the company. This Court pointed out that a person may be a Director and thus belongs to the group of persons making the policy followed by the company, but yet may not be in charge of the business of the company; that a person may be a manager who is in charge of the business but may not be in overall charge of the business; and that a person may be an officer who may be in charge of only some part of the business. 11. In view of the aforesaid discussion, I am unable to accept the contentions of the learned counsel for the opposite party No. 2 that merely because the petitioners were directors/additional directors of the company it has to be inferred that they were in-charge of the affairs of the company. It is also pertinent to note that specific overt ai ts of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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