TaxTMI 
TaxTMI 
2007 (1) TMI 257
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....to the complainant by the Company. The Company issued three cheques, as noticed hereinbefore, in favour of the complainant. The said cheques were deposited in a bank but were dishonoured. A complaint petition came to be filed by the complainant in the Court of Chief Metropolitan Magistrate, Delhi against the appellant as also the said Company. The Managing Director of the said Company as also the other Directors were also arrayed as accused therein. It was alleged that Shri K.K. Pilania Accused No. 3 and Shri N.K. Munjal Accused No. 8 signed the said cheques for and on behalf of the Company. 4. Cognizance was taken against the appellant and other accused persons. Inter alia on the premise that the appellant had resigned from the Directorship of the Company before the date of issuance of the cheques and much before the deposit thereof by the drawee with its bank, and thus, he was not liable for the action of the Company, applications for quashing of the orders taking cognizance of the offence in the said complaint petitions were filed by the appellant before the High Court of Delhi which were marked as Crl. M.C. Nos. 4583, 4580 and 4575 of 2003. By reason of the impugned judgment....
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....xtend to twice the amount of the cheque, or with both:" 9. For creating a criminal liability in terms of the said section, the complainant must show: (i)that a cheque was issued; (ii)the same was presented; (iii)but, it was dishonoured; (iv)a notice in terms of the said provision was served on the person sought to be made liable; and (v)despite service of notice, neither any payment was made nor other obligations, if any, were complied with within fifteen days from the date of receipt of the notice. 10. Section 141 of the Act postulates constructive liability on the part of the Directors of the Company or other persons responsible for its conduct of the business of the company. It reads as under: "Offences by companies.-(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any perso....
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....otherwise, there is no averment in the complaint petitions as to how and in what manner the appellant was responsible for the conduct of the business of the Company or otherwise responsible to it in regard to its functioning. He had not issued any cheque. How he is responsible for dishonour of the cheque has not been stated. The allegations made in paragraph 3, thus, in our opinion do not satisfy the requirements of section 141 of the Act. 14. Our attention, however, has been drawn to the averments made in paragraphs 7 and 10 of the complaint petition, but on a perusal thereof, it would appear that therein merely allegations have been made that the cheques in question were presented before the bank and they have been dishonoured. Allegations to satisfy the requirements of section 138 of the Act might have been made in the complaint petition but the same principally relate to the purported offence made by the Company. With a view to make a Director of a Company vicariously liable for the acts of the Company, it was obligatory on the part of the complainant to make specific allegations as are required in law. 15. The question came up for consideration before a 3-Judge Bench of ....
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....de liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action. 12. A reference to sub-section (2) of section 141 fortifies the above reasoning because sub-section (2) envisages direct involvement of any Director, Manager, Secretary or other officer of a company in commission of an offence. This section operates when in a trial it is proved that the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of these offices in a company. In such a case, such persons are to be held liable. Provision has been made for Directors, Managers, Secretaries and other officers of a company to cover them in cases of their proved involvement." (p. 139) It was further opined: "18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under section 141 of the Act is sought to be fastened vicariously on a person connected with a Company, the principal accused being the company itself. It is a departure ....