TaxTMI 
TaxTMI 
2008 (5) TMI 420
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...., 1881 (hereinafter called the 'Act') alleging that the accused had issued two cheques dated 25-11-2001 and 18-12-2001, each for Rupees One Lakh, which had been dishonoured on 20-12-2001 with the remarks 'Exceeds Arrangements'. Notice was issued to accused No. 1, i.e., the Company, including accused No. 2 Paresh P. Rajda, the Chairman and accused No. 4 Vijay Shroff, a director of the company and they appeared reluctantly before the court after bailable warrants had been issued. Accused Paresh Rajda thereupon moved an application that as per the averments made in the complaint itself, no case for summoning him had been made out as no overt act with regard to the issuance of the dishonoured cheques had been attributed to him. The High Court, ....
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....ffence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, would be deemed to be guilty of the offence and would be liable to be proceeded against and as no such allegations had been made in the complaint, the issuance of process against the accused was not justified. In support of this argument, he has placed reliance on S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla [2005] 63 SCL 93 and N.K. Wahi v. Shekhar Singh [2007] 9 SCC 481. The learned counsel for the respondents has, however, submitted that it was not possible at this stage and without evidence to reach a conclusion as to the liability of the appellant and it was, therefore, appropriate that the matter be left to trial, ....
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....s not necessary to specifically state in the complaint that the person accused was in charge of, or responsible for, the conduct of the business of the company. (b)Whether a director of a company would be deemed to be in charge of, and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary. (c)Even if it is held that specific averments are necessary, whether in the absence of such averments the signatory of the cheque and/or the managing directors or joint managing director who admittedly would be in charge of the company and responsible to the company for conduct of its business could be proceeded against." (p. 76) The above questions wer....
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....of and responsible for the conduct of business of the company. Therefore, they get covered under section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of section 141." (p. 76) 6. As this matter had come before the three-Judge Bench on a reference, the Bench reverted the matter for a discussion on facts to a Bench of two-Judges. It was this matter which was again examined by the Bench and reported as S.M.S. Pharmaceuticals Ltd.'s case (supra) and it was found that the necessary averments had been made in the complaint so as to attract the provisions of section 141 of the Act. The appeal filed by the company was accordi....
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....for consideration in N.K. Wahi's case (supra) which reiterated the earlier view and held that where there were no clear averment in the complaint or the evidence with regard to the role played by the Directors and as to whether and they were in charge and responsible for the conduct of the affairs of the company, it would not be possible to maintain the prosecution against them and they were entitled to acquittal. It may however be noticed that this was a case where an acquittal was recorded after trial. 8. It will be clear from the aforequoted judgments that the entire matter would boil down to an examination of the nature of averments made in the complaint though we observe a slight digression in the judgment in N. Rangachari's case (sup....