Cheque dishonour vicarious liability requires specific averments of control and responsibility before directors can be prosecuted.

In a prosecution for cheque dishonour by a company, vicarious liability under Section 141 of the Negotiable Instruments Act arises only where the complaint contains specific averments that the accused was in charge of and responsible for the company's business, or that the offence occurred with consent, connivance, or negligence. A mere designation as director is insufficient. Applying that principle, the complaint disclosed a specific role only for the Managing Director and Joint Managing Director connected with the cheque transaction, while no foundational allegations were made against the other directors. Proceedings were therefore sustained against the persons specifically linked to the transaction and quashed against the remaining directors.

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Issues: Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the complaint contained sufficient allegations to proceed against all the directors of the company, and whether process could be sustained against those directors against whom no specific role or responsibility in the conduct of business was pleaded.

Analysis: Vicarious liability under Section 141 of the Negotiable Instruments Act, 1881 arises only when the complaint specifically alleges that the person sought to be prosecuted was in charge of and responsible for the conduct of the business of the company at the relevant time, or that the offence was committed with that person's consent, connivance, or negligence. Mere description as a director, or inclusion in a notice or complaint without clear and unambiguous averments, is insufficient. Applying that principle, the complaint disclosed a specific role only in respect of the Joint Managing Director and the Managing Director who were connected with the transaction and issuance of the cheque. There were no allegations against petitioners 4 to 8 showing that they were in charge of the business or had any active role in the dishonour of the cheque.

Conclusion: The complaint and process were sustainable against petitioners 1 to 3, but the proceedings against petitioners 4 to 8 could not be maintained and were quashed.

Final Conclusion: The petition succeeded only to the extent of excluding the directors against whom no foundational allegations were made, while the prosecution was permitted to continue against the persons specifically connected with the transaction and the cheque.

Ratio Decidendi: In a prosecution for dishonour of cheque by a company, directors or officers can be proceeded against only if the complaint contains specific averments showing that they were in charge of and responsible for the conduct of the business, or that the offence occurred with their consent, connivance, or neglect.

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