TaxTMI 
TaxTMI 
2016 (9) TMI 965
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct (hereinafter referred to as 'Act'), titled Countrywide Promoters Pvt. Ltd. Vs. Era Landmarks Ltd. & Ors and the summoning order (s) dated March 01, 2011 and May 14, 2013 and all proceedings arising there from. 3. The brief facts necessitating the disposal of the present petitions are that the accused company, in which the petitioner was alleged to be a director, entered into an MOU with the Complainant Company/respondent No.2 for development of a parcel of land in Haryana. Pursuant to the MOU, a Development Rights Agreement dated April 13, 2007 was entered into between the parties and subsequently a Share Purchase Agreement dated May 05, 2008 was entered into between the parties. It is the case of the complainant that vide letter dated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith which I am not concerned, being filed by the complainant in the Court of the learned Metropolitan Magistrate, in which after recording pre-summoning evidence the company and its Directors, including the petitioner have been summoned. 4. It is the case of the petitioner that at the time when the alleged offences were committed he had ceased to be a director of the company evidenced by Form No.32 submitted to the Registrar of Companies which shows that the petitioner ceased to be a director of the company with effect from November 12, 2009. 5. It is the further case of the petitioner that the complaint contains bald allegations against the petitioner that he had interacted and participated in various negotiations between t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... conduct of business of the company would naturally know why the cheque in question was issued and why it got dishonoured. It is the case of the complainant company that in the present case the complaint clearly states that the petitioner played an active role in the transaction between the parties and hence can be held vicariously liable under Section 141 of the Act. 7. It is the case of the complainant company that whether the petitioner ceased to be a director of the accused company is a matter of evidence. 8. Needless to state the facts of each case have to be considered. In SMS Pharmaceutical's case (supra) the Supreme Court had held:- "15. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be co....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to question posed in sub-para (b) has to be in negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany, shall also be deemed to be guilty of the offence along with the Company. It appears to us that an allegation in the complaint that the named accused are Directors of the Company itself would usher in the element of their acting for and on behalf of the company and of their being in charge of the Company. A person normally having business or commercial dealings with a Company, would satisfy himself about its creditworthiness and reliability by looking at its promoters and Board of Directors and the nature and extent of its business and its memorandum or articles of association. Other than that, he may not be aware of the arrangements within the Company in regard to its management, daily routine, etc. Therefore, when a cheque issued t....