1998 (8) TMI 632

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....sed No. 1, issued certain cheques signed by its chairman-cum-managing director, accused No. 2, in favor of respondent No. 1 for purchasing certain goods from them. The said cheques, on presentation were received back unpaid with the remark "insufficient funds". Thereupon, a legal notice was issued on behalf of respondent No. 1 to the affronted company demanding payment and there being no response to the notice, a complaint under the said section was filed against the company, and its three directors, viz., the chairman-cum-managing director and the petitioners, the other two directors of the company. After pre-summoning evidence, all the named accused were summoned and charge under Section 138 of the Act was framed against all of them. 3....

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....ses [1995] 2 CCC 378 ; [1999] 97 CC 129 7. I am unable to persuade myself to agree with learned counsel for respondent No. 1. Section 141 of the Act reads as follows : "141. 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 person liable to punishment if he proves that the offence was committed without his knowledge, or that he....

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....s, or managers, etc., can be hauled up only if the offence by the company has been committed with the consent or connivance of the person falling in that category or is attributable to him, for which there should be averments in the complaint or prima facie proof for it. The section being penal had to be construed strictly. The initial onus to prove that a person was in charge of and was responsible to the company for the conduct of its business at the relevant time is obviously on the complainant. Even after the complainant discharges the initial onus as per proviso to the said section, the person accused can still prove that the offence committed by the company was without his knowledge or that he had exercised due diligence to prevent th....