Company liability and director summons: personal process is invalid unless the complaint alleges knowing or wilful authorisation of default.

Section 136(4) was treated as primarily imposing liability on the company, while personal liability of a Managing Director could arise only if the complaint alleged that he knowingly or wilfully authorised or permitted the default. In the absence of such an allegation, the Managing Director could not be personally summoned for a prosecution directed at the company. The company, as a separate legal entity, had to be proceeded against in its own capacity, and service of summons on the company was available under section 69(3) of the Criminal Procedure Code. The summons against the Managing Director was therefore invalid, but proceedings could continue against the company in accordance with law.

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Issues: Whether the Magistrate could summon the Managing Director personally without any allegation that he knowingly or wilfully authorised or permitted the default, and whether proceedings intended against the company should have been taken against the company itself.

Analysis: Liability under sub-section (4) of section 136 was treated as attaching to the company, while personal liability of the Managing Director could arise only on proof that he knowingly or wilfully authorised or permitted the default. The complaint contained no such allegation against him. The order and summons did not show that he was summoned in a representative capacity for the company, although the company was the real target of the prosecution. Since a company is a legal entity, it could be summoned directly, and the procedure adopted in summoning the Managing Director without making the company a party was incorrect. Service of a summons on the company was available under section 69(3) of the Criminal Procedure Code.

Conclusion: The order summoning the petitioner was set aside insofar as it concerned him, and the Magistrate was directed to proceed with the prosecution of the company according to law.

Final Conclusion: The challenge succeeded to the extent that the personal summons against the Managing Director was invalid, while the prosecution against the company was left open for appropriate action in accordance with law.

Ratio Decidendi: Where statutory liability is primarily that of the company, a director cannot be personally summoned unless the complaint alleges the specific mental element or authorisation required for personal liability, and the company must be proceeded against in its own legal capacity.

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