Managing Director liability under the Negotiable Instruments Act: absence of a verbatim Section 141 averment did not justify quashing.

Section 141 of the Negotiable Instruments Act fastens liability on persons in charge of and responsible for a company's business, but a Managing Director is ordinarily presumed to have such control and responsibility. Where the complaint, agreement and reply notice consistently described the accused as Managing Director, the absence of a verbatim averment reproducing Section 141 was not by itself fatal. The High Court therefore held that quashing under Section 482 CrPC was unwarranted and the Section 138 proceedings could continue.

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Issues: Whether criminal proceedings for an offence under Section 138 of the Negotiable Instruments Act, 1881 could be quashed for want of an express averment in the complaint that the accused was in charge of and responsible to the company, where the complaint and connected documents described him as the Managing Director.

Analysis: Section 141 of the Negotiable Instruments Act, 1881 fastens liability on a company and every person who, at the relevant time, was in charge of and responsible to the company for the conduct of its business. While a mere designation as director may not by itself establish the necessary responsibility, the position of Managing Director ordinarily carries with it the control and responsibility of management. Here, the complaint, the underlying agreement, and the reply notice consistently described the accused as Managing Director of the company. In those circumstances, the absence of a verbatim averment reproducing the language of Section 141 did not justify quashing the proceedings under Section 482 of the Code of Criminal Procedure, 1973.

Conclusion: The petition for quashing was rejected; the proceedings under Section 138 were allowed to continue.

Ratio Decidendi: Where the complaint and accompanying material clearly show that the accused is the Managing Director of the company, the omission of an explicit Section 141 averment is not by itself fatal to the prosecution.

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