Vicarious liability in cheque dishonour complaints survives on specific director averments; Section 202 inquiry was not mandatory.

Specific averments that directors were in charge of and responsible for the company's business, and had dealt personally with the complainant, were held sufficient to justify issuance of process under Sections 138 and 141 of the Negotiable Instruments Act. Defences disputing their role raised matters for trial, and quashing was not warranted absent unimpeachable material showing they could never have been responsible for the company's affairs. The absence of an inquiry under Section 202 of the Code of Criminal Procedure did not vitiate the process, as that inquiry was not treated as mandatory in this class of proceedings where sufficient material already existed before the court.

---

---

Issues: (i) Whether the complaint disclosed sufficient averments to attract vicarious liability against the directors under Section 141 of the Negotiable Instruments Act, 1881 so as to justify issuance of process for the offence under Section 138 of the Negotiable Instruments Act, 1881. (ii) Whether absence of inquiry under Section 202 of the Code of Criminal Procedure, 1973 vitiated the process issued against the accused.

Issue (i): Whether the complaint disclosed sufficient averments to attract vicarious liability against the directors under Section 141 of the Negotiable Instruments Act, 1881 so as to justify issuance of process for the offence under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The complaint contained specific assertions that the accused other than the company were in charge of and responsible for the conduct of the company's business and had personally dealt with the complainant. The pleadings and reply notices also indicated that the petitioners and the applicant were directors with involvement in the company's affairs. At the stage of process, such averments were sufficient, and the defences raised by the accused disclosed disputed questions that could only be tested at trial. Quashing was not warranted in the absence of unimpeachable material showing that they could never have been responsible for the business of the company.

Conclusion: The complaint made out a prima facie case under Sections 138 and 141 of the Negotiable Instruments Act, 1881, and the challenge to issuance of process failed.

Issue (ii): Whether absence of inquiry under Section 202 of the Code of Criminal Procedure, 1973 vitiated the process issued against the accused.

Analysis: The requirement of inquiry under Section 202 of the Code of Criminal Procedure, 1973 was held not to be mandatory in the present class of proceedings under Section 138 of the Negotiable Instruments Act, 1881. Since sufficient material was already before the trial court for issuance of process, non-conduct of such inquiry did not render the order vulnerable.

Conclusion: The challenge based on Section 202 of the Code of Criminal Procedure, 1973 was rejected.

Final Conclusion: The proceedings were found fit to continue, as the accused could not be exonerated at the threshold and the matters raised by them required trial.

Ratio Decidendi: In a prosecution under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, specific averments that the accused were in charge of and responsible for the conduct of the company's business are sufficient to sustain process at the threshold, and such proceedings should not be quashed unless unimpeachable material shows otherwise; inquiry under Section 202 of the Code of Criminal Procedure, 1973 is not mandatory in such proceedings where sufficient material exists for issuance of process.

---