TaxTMI 
TaxTMI 
TaxTMI 
2010 (3) TMI 914
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....l for the petitioner states that the petitioner who was a director of M/s. L. P. Electronics (Orissa) P. Ltd., has been implicated as an accused in a proceeding under section 138 of the Negotiable Instruments Act, 1881, inter alia, only for the reason of her having been named as director of such company. He asserts that other similarly placed directors had also filed application under section 482 of the Code of Criminal Procedure, 1973, for quashing of order of cognisance, namely, Sri Om Prakash Ram and Sri Deepak Kumar Ram in CRL. M. C. Nos. 1051 and 1900 of 2008 which were disposed of on May 19, 2009, whereby hon'ble Mr. Justice B. K. Patel came to a conclusion that there were no express averments made in the complaint petition that any o....
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....e made therein to an earlier judgment in the case of N. Rangachari v. Bharat Sanchar Nigam Ltd. [2007] 137 Comp Cas 198 (SC), in which it is observed that in the commercial world having a transaction with a company is entitled to presume that the directors of the company are in charge of the affairs of the company. If any restrictions on their powers are placed by the memorandum of articles of the company, it is for the directors to establish it at the trial. 5. Sri Pal, learned counsel for the petitioner on the other hand placed reliance upon the recent judgment of the hon'ble Supreme Court in the case of National Small Industries Corp. Ltd. v. Harmeet Singh Paintal [2010] 98 SCL 407 ; Manu/SC/0112/2010, which was disposed of on February ....
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....n sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section,- (a)"company" means any body corporate and includes a firm or other association of individuals ; and (b)"director", in relation to a firm, means a partner in the firm.' It is very clear from the above provision that what is required is that....
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....sible to the accused-company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. A company may have a number of directors and to make any or all the directors as accused in a complaint merely on the basis of a statement that they are in charge of and responsible for the conduct of the business of the company without anything more is not sufficient or adequate fulfilment of the requirements under section 141. In a catena of decisions, this court has held that for making the directors liable for the offences committed by the company under section 141 of the Act, there must be specific averments against the directors, showing as to how....
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....ation with all directors in order to liquidate their liability but subsequently with a view to defraud the claim of complainant knowing fully well their liability purposefully have defaulted to pay to the complainant. The complainant company officials have time to time contacted all the directors of the accused company before and after issue of cheque but to defraud the claim of complainant has stopped payment of the cheque when they did not have sufficient balance to cover the cheque amount . . ." 8. On a reading of section 141 of the Negotiable Instruments Act vis-a-vis the complaint made in this application it would be clear that necessary averments to implicate a director such as the present petitioner for having connived or neglected ....