Vicarious liability requires specific averments; absence quashes director proceedings; plea may be recorded through counsel subject to recall.

Vicarious liability under Section 141 of the Negotiable Instruments Act requires the complaint to specifically aver that an accused was "in charge of, and responsible to" the company for conduct of its day-to-day business at the material time; mere director status or general allegations of responsibility are insufficient, and absence of such averments justified quashing proceedings against the directors. A person exempted from personal attendance under the Cr.P.C. may have plea and examination recorded through counsel under applicable procedure, but the court may recall the dispensation and order personal attendance if counsel's absence or conduct delays or prejudices the trial.

---

---

Issues: (i) Whether the complaint under Section 138 read with Section 141 of the Negotiable Instruments Act validly makes the company directors liable where the complaint lacks specific averments that they were "in charge of, and responsible to" the company for conduct of its day-to-day business at the time of the offence; (ii) Whether a petitioner granted dispensation from personal attendance under Section 205 Cr.P.C. may have plea and examination recorded through counsel and under what conditions the privilege may be recalled.

Issue (i): Whether directors/additional directors alleged in the complaint can be held vicariously liable under Section 141 of the Negotiable Instruments Act in absence of specific averments that they were in charge of and responsible for the company's day-to-day business at the relevant time.

Analysis: Section 141 of the Negotiable Instruments Act imposes vicarious liability only on persons who "were in charge of, and were responsible to the company for the conduct of the business of the company" at the time of the offence. Precedents require that a complaint must specifically aver that the accused director was in charge of and responsible for the running of day-to-day business; mere status as a director or allegation of being "responsible and liable for day-to-day business" without detailing that the person was actually in charge is insufficient. While the Companies Act, 2013 classifies whole-time directors as key managerial personnel and identifies officers in default, the deeming clause of Section 141 governs vicarious criminal liability under the Negotiable Instruments Act and cannot be supplanted by Companies Act classifications. The complaint before the Court contained only a general averment that the petitioners were directors and "responsible and liable for the day to day business and all the acts of accused No.1" but did not aver that they were in charge of the affairs of the company at the material time nor specify their overt acts or role in relation to the issuance and dishonour of the cheques.

Conclusion: The complaint fails to disclose the requisite specific averments required by Section 141 and established precedent; continuation of proceedings against the petitioners is an abuse of process and the proceedings against them are quashed.

Issue (ii): Whether a petitioner who has been granted exemption from personal attendance under Section 205 Cr.P.C. can have plea and examination under Section 313 Cr.P.C. recorded through counsel and under what conditions the trial court may recall the dispensation.

Analysis: A petitioner granted dispensation under Section 205 Cr.P.C. may have his plea recorded through counsel and his examination under Section 313 Cr.P.C. conducted following the procedure in Section 313(5) Cr.P.C.; this accommodation must not delay trial progress. If the petitioner's counsel absents, fails to participate, or causes delay, the trial court may recall the dispensation and direct personal presence in accordance with law to prevent prejudice or undue delay.

Conclusion: Plea and examination of the petitioner enjoying dispensation under Section 205 Cr.P.C. may be recorded through counsel and under Section 313(5) Cr.P.C.; the trial court may recall the dispensation and order personal attendance if counsel's absence or conduct causes delay.

Final Conclusion: The petitions are allowed insofar as the proceedings against the petitioners (directors) are quashed for failure to aver that they were in charge of and responsible for the company's day-to-day business at the material time; proceedings against other accused continue and the trial court is directed to proceed expeditiously, and procedural directions are issued regarding recording plea and examination for a petitioner exempted from personal attendance.

Ratio Decidendi: For criminal vicarious liability under Section 141 of the Negotiable Instruments Act, the complaint must specifically aver that the accused was "in charge of, and responsible to" the company for conduct of its day-to-day business at the relevant time; mere designation as director or general allegations of responsibility are insufficient to attract liability under Section 141.

---