Company officer liability under the Negotiable Instruments Act turns on specific averments of control and responsibility in the complaint.

Liability of company officers under section 141 of the Negotiable Instruments Act depends on clear averments that, when the offence was committed, they were in charge of and responsible for the company's business. Mere designation as a director is not sufficient, but the complaint must be read as a whole to see whether the necessary factual foundation is pleaded. Where the complaint specifically states that the Chairman handled day-to-day affairs and that the Joint Managing Director and Directors were responsible officers liable for repayment of the dishonoured cheque amounts, those averments are adequate at the pre-trial stage. The proceedings therefore could not be quashed at the threshold.

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Issues: Whether the complaint contained the requisite averments to proceed against the Chairman and Directors of the company for the offence under section 138 read with section 141 of the Negotiable Instruments Act, 1881.

Analysis: Liability of persons other than the company under section 141 depends upon clear averments that, at the time the offence was committed, such persons were in charge of and responsible for the conduct of the business of the company. Mere designation as a director is not enough, but the complaint is to be read as a whole to see whether the necessary factual foundation is laid. The complaint specifically stated that the Chairman was responsible for the day-to-day affairs and that the Joint Managing Director and Directors were responsible officers of the company liable to repay the dishonoured cheque amounts. At the stage before trial, such averments were sufficient to permit the proceedings to continue.

Conclusion: The complaint disclosed the necessary foundational averments against the appellants, and the proceedings could not be quashed at the threshold.

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