Vicarious liability in cheque dishonour cases requires specific averments that a non-signatory director controlled the company's business.

Vicarious criminal liability under Section 141 of the Negotiable Instruments Act is not attracted by designation alone. A complaint against a non-executive, non-signatory director must contain specific, fact-based averments showing that the accused was in charge of and responsible for the company's business when the offence occurred. Bald or omnibus allegations are insufficient, particularly where the cheque was signed by another officer and the materials indicate a limited role or later resignation. In the absence of such statutory foundation, proceedings for cheque dishonour cannot be sustained against that director.

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Issues: Whether a complaint under Sections 138, 141 and 142 of the Negotiable Instruments Act, 1881 could be quashed qua a non-executive, non-signatory director in the absence of specific averments showing that he was in charge of and responsible for the conduct of the company's business at the relevant time.

Analysis: Vicarious criminal liability under Section 141 is not attracted merely because a person holds the designation of director or chairperson. The complaint must contain specific averments that the accused was, at the time of the offence, in charge of and responsible for the conduct of the business of the company. A non-executive director, who is not a signatory to the cheque and against whom no material shows participation in the transaction or day-to-day affairs, cannot be proceeded against on bald and omnibus allegations alone. The complainant had already proceeded against the managing director who was the cheque signatory, while the material placed by the petitioner indicated a non-executive role and subsequent resignation. In these circumstances, continuation of proceedings against the petitioner would amount to an unwarranted of vicarious liability.

Conclusion: The complaint proceedings were liable to be quashed qua the petitioner, and the revisional order refusing relief was set aside.

Final Conclusion: Criminal process was held unsustainable against the petitioner for want of the statutory foundation required to fasten vicarious liability under Section 141 of the Negotiable Instruments Act, 1881.

Ratio Decidendi: For offences under Section 138 of the Negotiable Instruments Act, 1881, a director who is not a signatory to the cheque can be prosecuted only if the complaint contains specific, fact-based averments showing that he was in charge of and responsible for the conduct of the company's business at the relevant time; mere designation is insufficient.

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