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Issues: (i) Whether a Company Secretary could be made vicariously liable under Section 141(1) of the Negotiable Instruments Act, 1881 in the absence of averments that she was in charge of and responsible for the conduct of the company's business; (ii) Whether the complaints disclosed the ingredients of Section 141(2) of the Negotiable Instruments Act, 1881 by pleading consent, connivance or neglect on the part of the petitioner.
Issue (i): Whether a Company Secretary could be made vicariously liable under Section 141(1) of the Negotiable Instruments Act, 1881 in the absence of averments that she was in charge of and responsible for the conduct of the company's business.
Analysis: Section 141(1) fastens liability on persons who, at the time of the offence, were in charge of and responsible for the conduct of the business of the company. A Company Secretary performs statutory and secretarial functions and, by that designation alone, is not shown to have overall control of the company's day-to-day business. The complaints did not contain an adequate assertion that the petitioner had such control or responsibility, and her role as Company Secretary did not, without more, satisfy the requirements of sub-section (1).
Conclusion: The petitioner could not be held vicariously liable under Section 141(1).
Issue (ii): Whether the complaints disclosed the ingredients of Section 141(2) of the Negotiable Instruments Act, 1881 by pleading consent, connivance or neglect on the part of the petitioner.
Analysis: Section 141(2) requires allegations that the offence was committed with the consent, connivance or neglect of the concerned officer. The complaints contained only general and sweeping allegations that the petitioner, along with others, had given assurances regarding payment. They did not specifically plead that the offence or the dishonour of the cheques occurred with the petitioner's consent, connivance or neglect. In the absence of such foundational averments, the statutory basis for fastening liability under sub-section (2) was not made out.
Conclusion: The complaints did not disclose the requirements of Section 141(2) against the petitioner.
Final Conclusion: The continuation of the criminal complaints against the petitioner was unsustainable, and the proceedings, including the summoning orders, were quashed as an abuse of the process of law.
Ratio Decidendi: A Company Secretary cannot be proceeded against under Section 141 of the Negotiable Instruments Act, 1881 unless the complaint contains specific averments showing that she was in charge of and responsible for the company's business or that the offence was committed with her consent, connivance or neglect.
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