Vicarious liability under cheque dishonour law requires specific pleadings; a resigned director was not liable and proceedings were quashed.

An erstwhile director who had resigned before dishonour of the cheques and before the cause of action arose could not be made vicariously liable under Section 141 of the Negotiable Instruments Act for an offence under Section 138. Vicarious liability under Section 141 is penal in nature and must be strictly construed; a complaint must contain specific averments showing how the accused was in charge of and responsible for the company's business at the relevant time. As the cheques were issued after resignation, the resignation was reflected in company records, and no clear particulars showed involvement in day-to-day affairs, the complaint and criminal proceedings were liable to be quashed.

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Issues: Whether an erstwhile Director who had resigned before the cheques were dishonoured and before the cause of action arose could be made vicariously liable under Section 141 of the Negotiable Instruments Act, 1881 for an offence under Section 138 of that Act, and whether the complaint and criminal proceedings were liable to be quashed for want of specific averments as to his role in the company's business.

Analysis: Vicarious liability under Section 141 is a penal consequence and must be strictly construed. Mere designation as a Director is insufficient; the complaint must specifically plead how and in what manner the accused was in charge of and responsible for the conduct of the company's business at the relevant time. On the facts, the cheques that formed the subject of the complaint were issued after the appellant had already resigned as Director, his resignation was reflected in the company records, and there were no clear particulars showing that he was involved in the day-to-day affairs of the company when the cheques were dishonoured. In these circumstances, the statutory basis for fastening liability was absent.

Conclusion: The appellant could not be fastened with vicarious liability under Section 141, and the criminal complaint and proceedings against him were liable to be quashed.

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