Director vicarious liability under the Negotiable Instruments Act sustained where basic averments showed charge over company business; limitation defence left for trial.

A complaint under the Negotiable Instruments Act can proceed against a director when it contains basic averments that the director was in charge of and responsible for the company's business at the relevant time, and such pleadings satisfy the threshold requirement under Section 141. The complaint here specifically alleged that the director was involved in day-to-day business and transactions, so prosecution could not be avoided on that ground. A limitation defence based on whether the cheques represented a time-barred liability and whether later cheques amounted to written acknowledgment involved disputed facts and evidence, and was therefore not suitable for quashing under Section 482. The cognizance order was upheld and quashing was refused.

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Issues: (i) Whether the complaint contained the basic averment necessary to proceed against a director under Section 141 of the Negotiable Instruments Act, 1881; (ii) Whether the plea of limitation could justify quashing of the complaint at the stage of Section 482 proceedings.

Issue (i): Whether the complaint contained the basic averment necessary to proceed against a director under Section 141 of the Negotiable Instruments Act, 1881.

Analysis: Section 141 fastens vicarious liability on persons who, at the time of commission of the offence, were in charge of and responsible for the conduct of the business of the company. The complaint specifically stated that the applicant, along with the co-accused, was responsible for and in charge of the day-to-day business of the company and was involved in the transactions. Such averments satisfy the foundational requirement for proceeding against a director at the threshold. The distinction drawn from the earlier order was held to be factual, because in that case the relevant basic averments were absent.

Conclusion: The complaint disclosed the necessary averments, and the applicant could not avoid prosecution on that ground.

Issue (ii): Whether the plea of limitation could justify quashing of the complaint at the stage of Section 482 proceedings.

Analysis: The question whether the cheques represented a time-barred liability, and whether the later cheques amounted to acknowledgment in writing, depended on factual matters and evidence. Such issues were not suitable for determination in a petition for quashing. On the material pleaded, the complaint disclosed a prima facie case for proceeding under Section 138.

Conclusion: The limitation plea did not warrant quashing at that stage.

Final Conclusion: The cognizance order was upheld and the application for quashing was rejected.

Ratio Decidendi: A complaint under Section 138 of the Negotiable Instruments Act, 1881 can proceed against a director where it contains basic averments that the director was in charge of and responsible for the company's business, and factual defences such as limitation are not ordinarily decided in quashing proceedings.

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