Vicarious liability in cheque dishonour complaints turns on specific averments and cannot hinge on disputed resignation claims at process stage

In prosecutions under section 138 read with section 141 of the Negotiable Instruments Act, a disputed claim that a director had resigned before the relevant transactions cannot ordinarily be decided in writ proceedings at the stage of issuance of process, because it requires proof of documents and other evidence. The complaints were held to contain sufficient averments where they stated that the accused directors were in charge of and responsible for the company's business and were handling day-to-day affairs, which is enough to attract vicarious liability under section 141. The challenge to the summoning order therefore failed, and the proceedings were directed to continue expeditiously.

---

---

Issues: (i) Whether the writ petitions challenging issuance of process under section 138 read with section 141 of the Negotiable Instruments Act, 1881 were liable to be allowed on the ground that the petitioner had resigned as a director before the relevant transactions. (ii) Whether the complaints contained sufficient averments to attract vicarious liability of the petitioner as a director.

Issue (i): Whether the writ petitions challenging issuance of process under section 138 read with section 141 of the Negotiable Instruments Act, 1881 were liable to be allowed on the ground that the petitioner had resigned as a director before the relevant transactions.

Analysis: The question of resignation was disputed by the complainant and depended upon proof of the documents relied upon by the petitioner. Such a controversy required evidence and could not be conclusively determined in writ proceedings at the stage of issuance of process.

Conclusion: The plea based on resignation was rejected for consideration at this stage.

Issue (ii): Whether the complaints contained sufficient averments to attract vicarious liability of the petitioner as a director.

Analysis: The complaints specifically stated that the accused directors were in charge of and responsible for the conduct of the company's business and were looking after its day-to-day affairs. The allegations also asserted liability on the basis of the role attributed to the petitioner, which satisfied the requirement for proceeding under section 141 of the Negotiable Instruments Act, 1881.

Conclusion: The complaints contained sufficient averments and the issuance of process was upheld.

Final Conclusion: The challenge to the summoning order failed, while the trial was directed to proceed expeditiously with limited exemption from personal appearance granted to the petitioner.

Ratio Decidendi: In a prosecution under section 141 of the Negotiable Instruments Act, 1881, a complaint must contain specific averments that the accused was in charge of and responsible for the conduct of the company's business, and disputed questions of resignation or cessation of office cannot ordinarily be decided at the stage of process.

---