Director cannot escape criminal liability under Section 141 by claiming non-involvement in company operations

Delhi HC dismissed petition challenging vicarious liability under Section 141 NI Act. Petitioner, an Additional Director during cheque issuance period (2001-2012), claimed immunity as Independent Non-Executive Director. Court held that criminal liability extends to persons in charge of company business at time of offence, not based on mere designation. Complainant must make specific averments regarding director's responsibility. Form 32 showed petitioner as director when cheque was issued, not as Independent Non-Executive Director as claimed. Court ruled petitioner cannot escape liability by claiming non-involvement in agreements or cheque signing, as he held directorship during relevant period.

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Issues Involved:
1. Legality of the trial court's order dated 11.10.2018.
2. Legality of the revisional court's order dated 29.01.2019.
3. Vicarious liability of the petitioner under Section 138 and 141 of the NI Act.

Summary:

1. Legality of the trial court's order dated 11.10.2018:
The trial court opined that a prima facie case under section 138 of the NI Act was made out against the accused company and the remaining accused, including the petitioner. The court noted that the accused no. 2, with the consent of the accused no. 3 to 6, issued the cheque in question, which was dishonored due to "funds insufficient." The petitioner, being one of the directors, was in charge of day-to-day affairs and responsible for the conduct of business of the accused no. 1. The petitioner was summoned for offences punishable under section 138 read with section 141 of the NI Act.

2. Legality of the revisional court's order dated 29.01.2019:
The petitioner challenged the trial court's order through Criminal Revision No. 539/2018, which was dismissed by the revisional court. The revisional court observed that the complainant had specifically mentioned the roles of the petitioners in the complaint, stating that they were in charge of and responsible for the conduct of the business of the accused no. 1 company. The court found no illegality or infirmity in the trial court's order.

3. Vicarious liability of the petitioner under Section 138 and 141 of the NI Act:
The petitioner argued that he was an independent Non-Executive Director and not responsible for the day-to-day conduct of the business of the accused no. 1. He claimed that he was not a party to the Inter Corporate Deposit Agreement, Memorandum of Settlement, and Consent Award pursuant to which the cheque in question was issued. The petitioner contended that the complaint lacked specific averments to make him vicariously liable. However, the court noted that the complaint contained sufficient, adequate, and ample averments against the petitioner, making him vicariously liable. The court emphasized that the primary responsibility of the complainant is to make specific averments in the complaint to make the accused vicariously liable. The court held that the petitioner could not be absolved from his liability by merely pleading that he was an independent non-executive director.

Conclusion:
The petition was dismissed, and the court found no legal and factual infirmity in the orders passed by the trial court and the revisional court. The court clarified that none of the observations on factual positions in the judgment should be taken as an opinion on the final merits of the case.

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