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Issues: (i) whether the complaint contained sufficient averments to attract vicarious liability of the company directors under Section 141 of the Negotiable Instruments Act, 1881; (ii) whether the prior civil injunction and alleged disputed facts warranted quashing of the complaint and process under Section 482 of the Code of Criminal Procedure, 1973.
Issue (i): whether the complaint contained sufficient averments to attract vicarious liability of the company directors under Section 141 of the Negotiable Instruments Act, 1881.
Analysis: Liability under Section 141 depends on a specific pleading that the accused was, at the time of the offence, in charge of and responsible for the conduct of the business of the company. Mere designation as a director is insufficient. The complaint was examined and found to contain express averments that the concerned director was an active participant in the business transactions, took part in settlement of accounts, and acted in concert in relation to issuance of the cheques.
Conclusion: The complaint did contain the necessary averments, and vicarious liability was made out against the concerned director.
Issue (ii): whether the prior civil injunction and alleged disputed facts warranted quashing of the complaint and process under Section 482 of the Code of Criminal Procedure, 1973.
Analysis: A civil injunction cannot operate to restrain the institution or prosecution of criminal proceedings. The statutory bar under Section 41 of the Specific Relief Act, 1963, prevents injunctions against criminal proceedings, and the existence of a civil suit does not by itself nullify a criminal complaint based on dishonour of cheques. The court also declined to enter into disputed questions of fact in the exercise of quashing jurisdiction, since the complaint disclosed the factual foundation of the offence and such scrutiny is not appropriate at the threshold.
Conclusion: The civil proceedings did not justify quashing, and the challenge to the criminal process failed.
Final Conclusion: The petitions were rejected because the complaint disclosed the ingredients of the cheque dishonour offence and the accused director could be proceeded against on the pleaded facts, while the civil injunction did not bar the criminal prosecution.
Ratio Decidendi: For prosecution under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, the complaint must contain specific averments showing that the accused was in charge of and responsible for the company's business, and a civil injunction cannot restrain a criminal complaint where the complaint otherwise discloses the offence.
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