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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 ..... 0,000/-, cheque No. 007907 dated 01.04.2015 of Rs. 76,290/- and cheque No. 007908 dated 01.07.2015 of Rs. 38,146/- respectively in discharge of their liabilities towards the intercorporate deposit and the cheques upon presentation were returned unpaid with the endorsement 'exceeds arrangement'. Notice of dishonour was issued on behalf of the opposite party No. 2 but the value of the dishonoured cheques remained unpaid within the stipulated time frame. Hence, the impugned prosecution was instituted not only against accused No. 1-company and the Managing Director and signatory of the cheques but also against the petitioners who were variously described as part-time, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the induct of its business. When that is so, holders of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid ratios to the averments in the petition of complaint, I find that although the petitioners have been variously described as director/additional director of the accused No. 1-company and it has been alleged that they were responsible and liable for the day-to-day business and the acts of the accused company' there is no whisper in the complaint that they were 'inch arge of the affairs of the company' at the materials point of time. It has been strenuously argued that a whole time director by virtue of his position is to be deemed to be in-charge of the affairs of the company and reference has been made to Sections 2(51) and 2(60) of the Companies Act which read as follows : "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. 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 impr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiable Instruments Act that he is incharge of the affairs of the company. It may be profitable in this regard to note the observations of the Apex Court in K.K. Ahuja (supra) wherein the aforesaid expression 'in-charge of the affairs of the company' has been explained and it has, inter alia, been held as follows : "22. Section 141 uses the words "was in charge of, and was responsible to the company for the conduct of the business of the company". It is evident that a person who can be made vicariously liable under sub-section (1) of Section 141 is a person who is responsible to the company for the conduct of the business of the company and in addition is also in charge of the business of the company. There may be many Directors and secretaries 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r recording plea, and examination under Section 313 Cr.P.C. 16. Learned counsel appearing for the opposite party No. 2 submits that dispensation with personal attendance of petitioner No. 4 ought not to result in delay of the trial of the case. 17. In view of the aforesaid submissions, I observe that it shall be open to the trial court to record the plea of the petitioner No. 4 who is enjoying the privilege of dispensation with personal attendance under Section 205 Cr.P.C. through his learned lawyer and his examination under Section 313 Cr.P.C. may also be conducted following the procedure laid down under Section 313 (5) Cr.P.C. Petitioner No. 4, however, shall not raise any prejudice at the subsequent stage of the proceeding over such issue. It is further directed in the event the learned counsel representing the petitioner No. 4 absents himself and/or does not participate in the proceeding and causes delay, it shall be open to the trial court to forthwith recall the privilege granted to petitioner No. 4 in accordance with law and direct him to be personally present during the trial of the case. With the aforesaid directions, the petition along with the applications is disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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