Vicarious liability in cheque dishonour complaints survives quashing where pleadings sufficiently allege responsibility for company affairs.

Complaints under Section 138 of the Negotiable Instruments Act were not liable to be quashed where the complaint specifically alleged that the applicant signed the shareholders and share subscription agreements as authorised signatory and power of attorney holder, participated in the transaction, and was associated with the company's affairs. Section 141 requires an averment that the person sought to be liable was, at the relevant time, in charge of and responsible for the conduct of the company's business. Applying settled principles on vicarious liability in cheque dishonour matters, the High Court held the threshold pleadings were sufficient and that the issue required evidence, not quashing.

---

---

Issues: Whether the complaints under Section 138 of the Negotiable Instruments Act, 1881 were liable to be quashed against the applicant in exercise of inherent jurisdiction on the ground that the complaint did not contain specific averments satisfying Section 141 of the Negotiable Instruments Act, 1881.

Analysis: The complaint alleged that the applicant had signed the shareholders agreement and share subscription agreement as an authorised signatory and power of attorney holder of the promoters, had participated in the transaction leading to the refund liability, and was associated with the affairs of the company. Section 141 requires a specific assertion that the person sought to be made liable was, at the time of commission of the offence, in charge of and responsible for the conduct of the business of the company. Applying the settled principles governing vicarious liability in cheque dishonour , the Court found the averments sufficient at the threshold and held that the matter required evidence rather than quashing.

Conclusion: The challenge to the complaints failed, and the proceedings against the applicant were not liable to be quashed.

---