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TMI Blog2025 (1) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... ot an iota of averment made against the Petitioner that he continued to be the Director or was responsible for day-to-day conduct of business at the time in 2017, when the impugned Cheque was issued. Section 141 of the N.I. Act mandates that those Directors/Officials who are responsible for the day-to-day affairs of the Company are responsible for any dishonour of the Cheque issued for and on behalf of the Company. In the present case, there is not a single averment to show that the Petitioner was in any way responsible for the day-to-day affairs of the Company on the date of issuance of Cheque and cannot be summoned in a Complaint under Section 138 of N.I. Act, on the basis of his personal liability. Moreover, the Legal Notice dated 06.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Negotiable Instruments Act (hereinafter 'N.I. Act') in respect of dishonour of cheque dated 31.07.2017 in the sum of Rs. 4,26,72,257/- drawn in favour of the Complainant by M/s. Selco International Ltd, Respondent No. 2. 2. The fundamental grounds for challenge by the Petitioner are that a pre-condition for an offence to be made out under Section 141of the N.I. Act is that the person accused should be in charge and responsible for the conduct of the business of the Company at the time when the offence is committed under Section 138 of N.I. Act. However, the words of Section 141 indicate that the criminal liability of a Director must be determined on the date on which the offence is alleged to have been committed. The Petitioner was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Resolution placed on record. Even otherwise, the liability of the Petitioner is not confined to his being a Director in the Company, but is also on account of him being a Guarantor for the liability of the Company. 6. It is, therefore, submitted that there is no infirmity in the impugned Order, Summoning the Petitioner and the present Petition is liable to be dismissed. 7. Learned counsel for the Respondent has relied upon the judgment in Kirshna Texport & Capital Markets Ltd. vs. Ila A. Agrawal & Ors, Criminal Appeal No. 1220/2009, to argue that for filing a Complaint under Section 138 of the N.I. Act, an individual/separate Notice to the Directors who are In-charge and responsible for the acts of the Company need not be given. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any jointly and severally and they even pledged their shares and gave personal as well as corporate guarantee to secure the loan amount". 12. Further averments made are that the Complainant had sanctioned a total sum of Rs. 455 lakhs for utilisation by the accused/Company, for the Project. In the Loan Agreement dated 23.11.1998, it was envisaged that the repayment of the loan amount shall be made by the accused persons along with the interest, as and when such conditions arose. 13. The second Loan Agreement dated 21.03.2002 was executed between the Borrower Company (Respondent No. 2) and the Complainant Board whereby on the request of all the Respondents, a further amount of Rs. 1,400 lakhs was sanctioned for utilisation of the proposed P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed. 19. From the entire averments made in the Petition, what emerges is that the Petitioner herein was admittedly the Director in the year 1998 at the time when the parties started negotiating initially. 20. There is not an iota of averment made against the Petitioner that he continued to be the Director or was responsible for day-to-day conduct of business at the time in 2017, when the impugned Cheque was issued. 21. Section 141 of the N.I. Act mandates that those Directors/Officials who are responsible for the day-to-day affairs of the Company are responsible for any dishonour of the Cheque issued for and on behalf of the Company. 22. Learned counsel for the Respondent No. 1/Complainant had tried to rope in the Petitioner by ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a single averment to show that the Petitioner was in any way responsible for the day-to-day affairs of the Company on the date of issuance of Cheque and cannot be summoned in a Complaint under Section 138 of N.I. Act, on the basis of his personal liability. Moreover, the Legal Notice dated 06.09.2017 is addressed only to the Respondent No. 2/Company/M/s Selco International Ltd. and Respondent No. 3/Dr. Venkata Rama Krishna Govindraju a.k.a. Dr. G.V. Rama Krishna; it is not addressed to the Petitioner. 27. He is neither a signatory to the Cheque nor is a Director in the accused-Company and there is no Legal Notice served upon him; therefore, he is entitled to be discharged. Conclusion: - 28. Therefore, the impugned Order dated 18.05.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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