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Issues: Whether the summoning order could be sustained against an independent director of the accused company in the absence of specific averments showing that she was in charge of and responsible for the conduct of the company's business at the relevant time.
Analysis: Liability under Section 141 of the Negotiable Instruments Act, 1881 is not attracted merely because a person holds the designation of director. The complaint must contain clear and specific allegations as to how and in what manner the accused was in charge of and responsible for the conduct of the business of the company when the offence was committed. An independent or non-executive director is not presumed to be involved in day-to-day management, and vicarious liability cannot be fastened on the basis of bald or omnibus allegations. The Court found that the complaint contained only general assertions against all directors, without attributing any distinct role to the petitioner, and the material on record indicated that she was an independent director.
Conclusion: The summoning order, insofar as it related to the petitioner, could not be sustained and was quashed; the petition was allowed in favour of the petitioner.
Ratio Decidendi: In prosecutions under Sections 138 and 141 of the Negotiable Instruments Act, 1881, a director can be proceeded against only on the basis of specific pleadings and material showing that the director was in charge of and responsible for the company's business at the time of the offence; mere designation as a director is insufficient, especially for an independent or non-executive director.
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