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of <h1>Directors & Secretary Not Liable under Section 141 for Insufficient Averments</h1> <h3>Timothy Alfred Joseph Moses and Ors. Versus Ad Bureau Advertising Pvt. Ltd.</h3> Timothy Alfred Joseph Moses and Ors. Versus Ad Bureau Advertising Pvt. Ltd. - TMI Issues Involved:1. Quashing of the complaint under Section 138 of the Negotiable Instruments Act, 1881.2. Determination of the liability of directors and secretary of the company under Section 141 of the Negotiable Instruments Act.Detailed Analysis:Issue 1: Quashing of the Complaint under Section 138 of the Negotiable Instruments Act, 1881The petitioners, who are directors and the secretary of M/s. Mediaone Global Entertainment Ltd., sought to quash the complaint filed by the respondent under Section 138 of the Negotiable Instruments Act. The complaint alleged that the company defaulted on payments related to a Memorandum of Understanding for the post-production of a Tamil movie. The company issued a cheque for Rs. 3,00,00,000, which was dishonored due to insufficient funds. The respondent issued a demand notice, but the accused provided a reply with false reasons, leading to the filing of the complaint. The learned Judicial Magistrate took cognizance and issued summons to the petitioners.Issue 2: Determination of the Liability of Directors and Secretary under Section 141 of the Negotiable Instruments ActThe petitioners contended that they were merely directors and not in charge of or responsible for the conduct of the company's business. They argued that there was no specific averment in the complaint to this effect, which is essential to hold them liable. The respondent countered that all petitioners were involved in the day-to-day affairs of the company and were deemed to have committed the offense under Section 141 of the Act.The court analyzed whether the averment in the complaint that the petitioners were directly involved in the company's affairs was sufficient to make them liable under Section 141. It noted that there is no vicarious liability in criminal law unless explicitly stated by statute. Section 141 requires a specific averment that the accused were in charge of and responsible for the company's business at the time of the offense.The court referred to several Supreme Court judgments, including S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhatla, which emphasized the necessity of specific averments in the complaint to satisfy the requirements of Section 141. The court concluded that the complaint lacked specific averments that the petitioners were in charge of and responsible for the company's business. Merely stating that they were involved in the company's affairs was insufficient.The court further observed that the Judicial Magistrate must consider all materials and apply their mind to form an opinion that a prima facie case exists before issuing process. The absence of specific averments in the complaint led the court to quash the proceedings against the petitioners.Conclusion:The court allowed the criminal original petitions and quashed the proceedings in C.C. No. 3082 of 2015 on the file of the learned XIII Metropolitan Magistrate, Egmore, Chennai, against the petitioners. The connected miscellaneous petitions were also closed.
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