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of <h1>Directors' Liability Clarified in Quashing Proceedings under Negotiable Instruments Act</h1> The court quashed the proceedings against petitioners A-9, A-7, A-8, and A-6 under sections 138 and 141 of the Negotiable Instruments Act, emphasizing the ... Dishonour of cheques Issues:1. Quashing of proceedings under sections 138 and 141 of the Negotiable Instruments Act, 1881.2. Requirement of specific averments in the complaint against directors for maintaining the complaint.3. Interpretation of section 141(1) regarding liability of persons in charge of company's affairs.4. Application of legal precedents in determining sufficiency of allegations in the complaint.Issue 1: Quashing of Proceedings under Sections 138 and 141:The judgment concerns petitions filed under section 482 of the Criminal Procedure Code seeking to quash proceedings initiated under sections 138 and 141 of the Negotiable Instruments Act, 1881. The petitioners, identified as A-9, A-7, A-8, and A-6, sought to challenge the validity of the proceedings based on specific grounds presented by their counsel.Issue 2: Requirement of Specific Averments Against Directors:The judgment emphasizes the importance of specific averments in a complaint against directors or partners of a company to maintain a complaint under sections 138 and 141 of the Act. It is highlighted that mere allegations without explicit mention of the directors being in charge of and responsible for the company's affairs may lead to the quashing of proceedings against such individuals.Issue 3: Interpretation of Section 141(1) Regarding Liability of Persons in Charge:Section 141(1) of the Act stipulates that individuals, apart from the company, can be held liable for offenses committed by the company if they were in charge of and responsible for the company's affairs at the time of the offense. The judgment clarifies that for proceedings to be valid against such individuals, the complaint must explicitly state their role as directors in charge of the company's conduct.Issue 4: Application of Legal Precedents in Determining Sufficiency of Allegations:The judgment references legal precedents, including the Supreme Court decision in K.P.G. Nair v. Jindal Menthol India Ltd., to underscore the necessity of specific averments in a complaint to establish the liability of directors under section 141(1). It distinguishes other cases cited by the respondent where specific allegations were present, unlike the current case where vague assertions were made.In conclusion, the judgment quashes the proceedings against the petitioners (A-9, A-7, A-8, and A-6) due to the lack of explicit averments in the complaint regarding their roles as directors responsible for the company's affairs at the time of the offense. The decision aligns with legal principles requiring precise allegations to uphold complaints against individuals under sections 138 and 141 of the Negotiable Instruments Act.
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