Vicarious liability under the Negotiable Instruments Act requires company arraignment and specific averments against the director.

Prosecution of a company director under Section 138 of the Negotiable Instruments Act requires strict compliance with Section 141: the company must be arraigned as an accused, and the complaint must specifically aver that the director was in charge of and responsible for the conduct of the company's business at the relevant time. A bare description as director is insufficient to attract vicarious criminal liability. On the facts stated, the complaint omitted both the company and the necessary averments, so the proceedings against the director were not maintainable and the quashing was upheld.

---

---

Issues: (i) Whether a director of a company can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881 without arraigning the company as an accused; (ii) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 can proceed against a director in the absence of averments that the director was in charge of and responsible for the conduct of the company's business.

Issue (i): Whether a director of a company can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881 without arraigning the company as an accused.

Analysis: Section 141 fastens vicarious liability on persons connected with the company only when the company itself is the principal accused. The statutory scheme requires strict compliance, and the company's arraignment is an express condition precedent for prosecuting other persons on the basis of vicarious liability. The complaint in the present case did not implead the company, and the defect could not be cured after limitation had expired.

Conclusion: The prosecution against the director without arraigning the company was not maintainable.

Issue (ii): Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 can proceed against a director in the absence of averments that the director was in charge of and responsible for the conduct of the company's business.

Analysis: For fastening criminal liability under Section 141, the complaint must specifically aver that at the time of the offence the accused was in charge of and responsible for the conduct of the company's business. Merely describing a person as a director is insufficient. The complaint contained no such necessary averments, and the statutory requirements for vicarious criminal liability were therefore not satisfied.

Conclusion: The complaint was defective for want of the necessary averments and could not sustain the proceedings.

Final Conclusion: The High Court's quashing of the complaint and consequential proceedings was upheld, and the appeals failed.

Ratio Decidendi: For prosecution under Section 141 of the Negotiable Instruments Act, 1881, the company must be arraigned as an accused and the complaint must contain specific averments showing that the accused was in charge of and responsible for the conduct of the company's business at the relevant time.

---