Vicarious liability for cheque dishonour depends on control of company affairs at the time of dishonour, not mere signature.

Vicarious liability under the Negotiable Instruments Act attaches only if, when the offence is committed, the person was in charge of and responsible for the company's business. Mere signature on the cheque is not enough to establish criminal liability. On the facts, the petitioner had retired more than nine months before the cheques were presented and dishonoured, so he was no longer in control of the company's affairs at the relevant time. The deeming provision for company liability was therefore held not to apply prima facie, and the proceedings against him were stayed.

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Issues: Whether the petitioner, who had retired from the company before the cheques were presented and dishonoured, could be proceeded against under the vicarious liability provision for an offence under the Negotiable Instruments Act.

Analysis: Liability under the offence is triggered when the cheque is returned unpaid, and in the case of a company the further requirement is that the person sought to be proceeded against was, at the time the offence was committed, in charge of and responsible to the company for its business. Mere signature on the cheque does not by itself establish criminal liability. On the material placed, the petitioner had retired more than nine months before presentation and dishonour of the cheques and was therefore no longer in control of the company's affairs at the relevant time.

Conclusion: The deeming provision for company liability did not, on a prima facie view, apply to the petitioner, and the proceedings against him were stayed.

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