Vicarious liability of non-executive directors under cheque dishonour law requires specific averments of control and responsibility.

Vicarious criminal liability under Section 141 of the Negotiable Instruments Act requires specific averments that a director was in charge of and responsible for the company's business at the relevant time. Mere designation as a director is insufficient, and liability cannot be fastened on an independent non-executive director who is not shown to have been involved in day-to-day affairs, financial decisions, or the dishonoured cheques. On the stated record, the complaints lacked the necessary particulars and the appellant had no active role in the transactions, so the proceedings were liable to be quashed.

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Issues: Whether an independent non-executive director could be proceeded against under Sections 138 and 141 of the Negotiable Instruments Act, 1881 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: Liability under Section 141 is vicarious and penal in nature and therefore requires strict construction. Mere designation as a director does not create automatic criminal liability. The complaint must contain specific and unambiguous averments showing the role played by the director and how he was responsible for the conduct of the business when the offence occurred. A non-executive director, who is not involved in day-to-day operations or financial decision-making and who was not a signatory to the dishonoured cheques, cannot be roped in merely on account of office held. On the record, the complaints lacked such particulars and the appellant was shown to have had no active role in the relevant transactions.

Conclusion: The appellant could not be fastened with vicarious liability under Section 141 of the Negotiable Instruments Act, 1881, and the proceedings against him were liable to be quashed.

Final Conclusion: The criminal complaints against the appellant were set aside and quashed, and the appeals succeeded.

Ratio Decidendi: For fastening liability on a director under Section 141 of the Negotiable Instruments Act, 1881, the complaint must specifically aver and, where required, establish that the director was in charge of and responsible for the conduct of the company's business at the relevant time; mere directorship is insufficient.

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