Vicarious liability under the Negotiable Instruments Act turns on specific averments and proof of resignation before the relevant date.

Complaints under the Negotiable Instruments Act attract vicarious liability under section 141 only if they specifically plead that the accused was in charge of and responsible for the company's business; complaints containing those averments were maintainable, while bare references to a former office-holder were deficient. On a recall application, the court may consider reliable material showing resignation from directorship before the relevant date. Where resignation was admitted or supported by consistent documents, it was accepted as effective from the date tendered; where resignation itself was disputed, the issue was left for trial. Process was upheld in matters with sufficient averments or an unshaken prosecution case, and set aside where pleadings were lacking or the resignation defence required trial.

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Issues: (i) whether the complaints under the Negotiable Instruments Act contained sufficient averments to attract vicarious liability of the company's chairman/managing director or director under section 141; (ii) whether the accused's resignation as director could be accepted at the stage of recalling process and whether the date of resignation defeated the prosecution.

Issue (i): whether the complaints under the Negotiable Instruments Act contained sufficient averments to attract vicarious liability of the company's chairman/managing director or director under section 141.

Analysis: For complaints that specifically described the accused as chairman-cum-managing director or alleged that he was in charge of and responsible for the company's business, the statutory requirement under section 141 was treated as satisfied. A managing director is, by definition, entrusted with substantial powers of management, and such description, coupled with the pleadings in the complaints, was held sufficient where the necessary allegations were present. Where the complaints merely treated him as a former office-holder without averring that he was in charge on the relevant date, the pleadings were found deficient.

Conclusion: The complaints containing the requisite averments were held maintainable against the accused under section 141, while complaints lacking such particulars were not.

Issue (ii): whether the accused's resignation as director could be accepted at the stage of recalling process and whether the date of resignation defeated the prosecution.

Analysis: The court held that in proceedings for recall of process, reliable material produced by the accused could be considered. On the facts, some complainants had accepted the fact of resignation and disputed only the date, while others had completely denied the resignation. Where the fact of resignation was undisputed and the surrounding documents were consistent, the resignation was accepted as effective from the date tendered, not from the later date reflected in the company filing. Where resignation itself was seriously disputed, the matter was left for trial.

Conclusion: The resignation defence was accepted in some matters and rejected for trial in others, leading to dismissal of certain revisions and allowance of others with remand.

Final Conclusion: The common judgment upheld process against the accused in those complaints where the statutory averments were sufficient or the resignation defence failed, but set aside the order in the remaining matters where the complaints were deficient or the resignation issue required trial.

Ratio Decidendi: For an offence by a company under section 138, a complaint must contain facts showing that the accused was in charge of and responsible for the company's business, and at the stage of recall the court may consider reliable material showing that the accused had ceased to hold office before the relevant date.

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