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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the petitioner, being the Chief Financial Officer and signatory of the cheque, could be arrayed as an accused in a complaint under Section 138 of the Negotiable Instruments Act, 1881 on the basis of Section 141 of that Act, and whether Section 28 of the Negotiable Instruments Act, 1881 excluded such liability.
Analysis: The complaint alleged that the petitioner was the Chief Financial Officer of the company, was its authorised signatory, had issued the cheque, and was in charge of and responsible for the conduct of the business at the relevant time. Under Section 141 of the Negotiable Instruments Act, 1881, a person who is in charge of and responsible to the company for the conduct of its business may be proceeded against for the offence under Section 138, and a person who signs the cheque on behalf of the company may, prima facie, be presumed to have such responsibility. The petitioner also fell within the definition of key managerial personnel under the Companies Act, 2013. The challenge based on Section 28 of the Negotiable Instruments Act, 1881 was rejected because the complaint did not seek to fasten liability merely as an agent or signatory, but invoked the statutory liability under Section 141.
Conclusion: The complaint disclosed sufficient for proceeding against the petitioner under Section 141 of the Negotiable Instruments Act, 1881, and the petitioner's challenge to his arraignment failed.
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