Vicarious liability in cheque dishonour cases requires specific averments; a resigned director is not automatically the drawer or liable.

In a company cheque-dishonour prosecution under Sections 138 and 141 of the Negotiable Instruments Act, vicarious liability depends on specific averments that the director was, at the relevant time, in charge of and responsible for the company's business, or that the offence occurred with consent, connivance, or neglect. A certified Form 32 showing resignation before issuance, presentation, dishonour, and expiry of the notice period was treated as authentic proof that the former director was no longer for the company when the offence was completed. Signing the cheque in a representative capacity did not, by itself, make him the personal drawer. The complaint and proceedings were quashed against the former director, while they continued against the company.

---

---

Issues: (i) Whether a former director, who had resigned before issuance/presentation of the cheque and before completion of the offence, could be proceeded against for an offence under Section 138 of the Negotiable Instruments Act, 1881 on the basis of vicarious liability under Section 141 of that Act; (ii) Whether the petitioner became the drawer of the cheque merely because he signed it on behalf of the company.

Issue (i): The liability of a director under Section 141 of the Negotiable Instruments Act, 1881 depends on specific averments showing that at the relevant time he was in charge of and responsible for the conduct of the business of the company, or that the offence was committed with his consent, connivance, or attributable neglect. A certified copy of Form 32, being an authentic public document, was relied upon to show that the petitioner had resigned as director before the cheque was issued, presented, dishonoured, and before the notice period expired. On those facts, he could not be treated as a person responsible for the company at the time when the offence was completed.

Conclusion: The petitioner was not vicariously liable under Section 141 of the Negotiable Instruments Act, 1881 and could not be prosecuted for the offence under Section 138.

Issue (ii): A person does not become the drawer of a cheque merely because he signed it on behalf of the company. Where the cheque is issued by the company in discharge of its liability and the signature is only in a representative capacity, the signatory is not personally the drawer for the purposes of Section 138 unless the case otherwise falls within the statutory requirements for fastening liability.

Conclusion: The petitioner was not the drawer of the cheque in his personal capacity and the contention based on his signature was rejected.

Final Conclusion: The criminal complaint and consequential proceedings were quashed against the petitioner, while the complaint was permitted to continue against the company.

Ratio Decidendi: In a prosecution for dishonour of cheque issued by a company, a former director cannot be fastened with vicarious liability unless the complaint contains the necessary statutory averments and it is shown that he was in charge of and responsible for the company, or that the offence was committed with his consent, connivance, or neglect; signing the cheque in a representative capacity does not by itself make him the drawer.

---