Vicarious liability for cheque dishonour requires a clear averment that directors were in charge of company business.

For vicarious criminal liability of company directors in a cheque dishonour prosecution, the complaint must specifically or by necessary implication aver that the accused was, at the relevant time, in charge of and responsible for the conduct of the company's business under Section 141 of the Negotiable Instruments Act, 1881. Mere designation as a director, or an allegation that directors were only consulted in business affairs, is insufficient. On the facts stated, the complaint indicated that business and financial affairs were administered by others and that the accused were only consulted, so the statutory foundation for fastening liability was absent. The proceedings against the accused were therefore liable to be quashed.

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Issues: Whether, in a prosecution for dishonour of cheque against directors of a company, the complaint contained the essential averment that the accused were in charge of and responsible for the conduct of the business of the company at the time the offence was committed, so as to attract vicarious liability under Section 141 of the Negotiable Instruments Act, 1881.

Analysis: For fastening liability on directors under Section 141 of the Negotiable Instruments Act, 1881, the complaint must specifically or by necessary implication state that the accused was, at the relevant time, in charge of and responsible for the conduct of the business of the company. Mere designation as a director, or a general statement that directors consulted in business affairs, is not enough. The substance of the complaint in the present case showed that the business and financial affairs were decided and administered by other persons, while the present accused were only consulted. That was insufficient to satisfy the statutory requirement. The complaint therefore lacked the essential foundation for vicarious criminal liability.

Conclusion: The prosecutions against the present accused could not continue for want of the necessary averments under Section 141 of the Negotiable Instruments Act, 1881, and the quashing of the proceedings was warranted.

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