Directors' liability under the Negotiable Instruments Act survives where complaint pleads responsibility for company business and cheque dishonour.

A prosecution under the Negotiable Instruments Act should not be quashed at the threshold where the complaint specifically avers that the accused directors were in charge of and responsible for the company's business. The complaint here also pleaded participation in the financial arrangement, consent to the memorandum of understanding, cheque dishonour for insufficiency of funds, service of statutory notice, and return of the notice marked "not claimed". Because these foundational facts and statutory presumptions under Sections 138, 139 and 141 were pleaded, the accused's contentions on lack of knowledge, due diligence, or absence of liability were matters for trial. The inherent jurisdiction was therefore not exercised to stop the prosecution.

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Issues: Whether the criminal complaint under the Negotiable Instruments Act could be quashed against the directors for want of specific averments regarding their responsibility for the conduct of business, and whether the statutory presumptions and pleaded facts were sufficient to permit the prosecution to proceed.

Analysis: The complaint contained an express assertion that the applicants were directors, were responsible for the business and affairs of the company, had participated in the financial arrangement, and had consented to the memorandum of understanding. It also pleaded issuance of the cheque, its dishonour for insufficiency of funds, service of statutory notice, and the return of the notice with the endorsement "not claimed". In such a prosecution, the requirement under Section 141 of the Negotiable Instruments Act is that there must be an averment that the accused were in charge of and responsible for the conduct of business at the relevant time. Where such averments are present, the matter is ordinarily one for trial. The presumption under Section 139 of the Negotiable Instruments Act also operates in favour of the holder of the cheque, and the defences regarding lack of knowledge, due diligence, or absence of liability are matters to be established by evidence. The allegations, therefore, did not justify exercise of inherent powers to interdict the prosecution at the threshold.

Conclusion: The complaint disclosed sufficient foundational averments to proceed against the directors, and the challenge to quash the proceedings failed.

Ratio Decidendi: A prosecution under Sections 138 and 141 of the Negotiable Instruments Act cannot be quashed where the complaint specifically avers that the accused directors were responsible for the conduct of the company's business; the statutory presumptions and defences under the Act are to be tested at trial.

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