Director liability under the Negotiable Instruments Act requires specific averments of control over company business; general allegations are insufficient.

Liability under Section 141 of the Negotiable Instruments Act attaches only to directors who were in charge of, or responsible for, the conduct of the company's business at the time of the offence. Mere designation as a director is insufficient, and the complaint must contain specific averments showing such responsibility. At the quashing stage, the High Court may interfere where unimpeachable material shows the accused was not so involved when the cheque dishonour occurred. General allegations and a pending investigation in another proceeding did not establish active participation, so the criminal proceedings against the petitioners were quashed.

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Issues: Whether criminal proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 could continue against directors of the drawer company in the absence of material showing that they were in charge of and responsible for the conduct of its business at the time the offence was committed.

Analysis: Liability under Section 141 attaches only to persons who, at the relevant time, were in charge of or responsible for the conduct of the business of the company. Mere designation as a director is not enough. The complaint must contain specific averments to that effect, and at the stage of quashing the process, the High Court may interfere where sterling, incontrovertible material shows that the accused was not so at the time of the offence. The general statements in the complaint, without more, were insufficient. The fact that an investigation was pending in another proceeding did not establish active participation in the company's affairs on the date of the cheque dishonour.

Conclusion: The proceedings against the petitioners could not be sustained and were quashed.

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