Vicarious liability of non-signatory directors under cheque dishonour law requires specific averments of responsibility and control.
Under Section 141 of the Negotiable Instruments Act, a criminal complaint against a director who was not a signatory to the cheques is maintainable only if it contains clear, specific averments that the director was in charge of and responsible for the company's business at the time of the offence. A mere description as a director, or a general assertion of involvement in management, is insufficient to impose vicarious liability. Applying that principle, the complaint contained only bald allegations without particulars of each director's role, so the proceedings against the petitioner were liable to be quashed.
Issues: Whether a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 against a director who was not a signatory to the cheques is maintainable in the absence of specific averments showing that he was in charge of and responsible for the conduct of the company's business.
Analysis: Section 141 of the Negotiable Instruments Act, 1881 fastens vicarious liability only when the complaint contains clear, unambiguous and specific allegations that the accused was in charge of and responsible for the conduct of the business of the company at the time of the offence. Mere designation as a director, or a bald assertion that the accused was involved in the management, is insufficient. Applying this principle to the complaint, the allegations against the petitioner were found to be bald and lacking particulars regarding the role played by each director.
Conclusion: The complaint was not maintainable against the petitioner and the proceedings were liable to be quashed.
Ratio Decidendi: For prosecution of a director under Section 141 of the Negotiable Instruments Act, 1881, the complaint must specifically aver the manner in which the director was in charge of and responsible for the conduct of the company's business; absent such averments, vicarious liability cannot be imposed.
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