Vicarious liability in cheque dishonour complaints survives where specific averments show directors' control and responsibility, leaving disputed resignation to trial.
Complaints under Section 138 read with Section 141 of the Negotiable Instruments Act were held maintainable where they contained specific averments that the accused directors were in charge of and responsible for the company's business at the relevant time, and that the offence occurred with their knowledge, consent and connivance. The court noted that the pleadings also referred to participation in the underlying transaction, including execution of the agreement and issuance of guarantees. A plea of resignation based on Form-32 and related documents, being disputed and not unimpeachable, could not be accepted at the threshold. The challenge to issuance of process therefore failed, and the defence was left to trial.
Issues: Whether the criminal complaints under Section 138 of the Negotiable Instruments Act disclosed sufficient averments and supporting material to attract vicarious liability under Section 141 against the petitioners, notwithstanding their plea of resignation from the company.
Analysis: The complaints contained specific assertions that the accused directors were in charge of and responsible for the day-to-day affairs of the company at the relevant time, and that the offence was committed with their knowledge, consent, and connivance. The pleadings also referred to the petitioners' participation in the underlying transaction, including execution of the agreement, issuance of guarantees, and other material indicating involvement in the company's affairs. The defence of resignation based on Form-32 and other documents was disputed by the complainant and was not shown to be unimpeachable or beyond controversy. In such circumstances, the veracity of the defence could not be determined at the threshold and had to be tested at trial.
Conclusion: The complaints were maintainable against the petitioners, and the challenge to the issuance of process failed.
Ratio Decidendi: A complaint under Section 141 of the Negotiable Instruments Act is maintainable where it contains specific averments that the accused was in charge of and responsible for the conduct of the company's business at the time of the offence, and the accused's plea of resignation cannot defeat prosecution at the threshold unless supported by unimpeachable material.
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