TaxTMI 
TaxTMI 
2020 (3) TMI 247
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....; Dated Amount in Rs 489872 02.09.2016 95,718/- 489853 09.09.2016 7,62,548/- 489897 19.09.2016 3,31,740/- 640194 07.11.2016 1,55,142/- 3. All the aforesaid cheques were drawn on State Bank of India, Nehru Place, New Delhi from the account maintained by accused company. The cheques were presented by the complainant in his bank namely Axis Bank Limited, Mundka Delhi within the period of limitation however the same were returned unpaid to the complainant vide bank's return memo dated 21.11.2016 and 13.12.2016 with the remarks "Funds Insufficient". 4. The complainant issued a legal notice of demand dated 19.12.2016, through speed post, calling upon the accused to make payment within 15 days from the date of its receipt. The notices were duly received by the accused persons on 20.12.2016. Since no payment was made within the statutory period of 15 days, a complaint under Section 138 read with Sections 141/142 of NI Act was filed on 30.01.2017. The complaint ha....
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....rom the official website of ROC. 9. I have heard learned counsels for the parties and have also gone through the case records. 10. The vicarious liability of a person arises in terms of Section 141 of the Negotiable Instrument Act. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla reported as (2005) 8 SCC 89, it was held as follows:- "10. While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. The key words which occur in the section are 'every person'. These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words: '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, etc' What is required is that the persons who are sought to be made criminally liable under Section 141 should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. ....
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....lt out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial." 11. Again in, K.K. Ahuja v. V.K. Vora reported as (2009) 10 SCC 48, the vicarious liability of the officers of the company was summarised as under:- "27. The position under Section 141 of the Negotiable Instruments Act, 1881 can be summarized thus: (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is ma....
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....helm of affairs of the Company, one who actively looks after the day-to-day activities of the Company and particularly responsible for the conduct of its business. Simply because a person is a Director of a Company, does not make him liable under the N.I. Act. Every person connected with the Company will not fall into the ambit of the provision. Time and again, it has been asserted by this Court that only those persons who were in charge of and responsible for the conduct of the business of the Company at the time of commission of an offence will be liable for criminal action. A Director, who was not in charge of and was not responsible for the conduct of the business of the Company at the relevant time, will not be liable for an offence under Section 141 of the N.I. Act. In National Small Industries Corporation (supra) this Court observed: "13. Section 141 is a penal provision creating vicarious liability, and which, as per settled law, must be strictly construed. It is therefore, not sufficient to make a bald cursory statement in a complaint that the Director (arrayed as an accused) is in charge of and responsible to the company for the conduct of the business of the com....
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....btained from the website of the Ministry of Corporate Affairs and unnecessary dragged the appellants in litigation who were not directly charged or responsible for the company for the conduct of business. The requirement of Section 141 of the Negotiable Instrument Act is against the persons responsible for the conduct or business of the company at the relevant time. In absence of such allegation against the appellants, we hold that the complainant misused the mandate of Section 138 of the Negotiable Instrument Act." 14. Recently, in Chintalapati Srinivasa Raju v. Securities and Exchange Board of India reported as (2018) 7 SCC 443, it has been held as follows:- "23....Non-Executive Directors are, therefore, persons who are not involved in the day-to-day affairs of the running of the company and are not in charge of and not responsible for the conduct of the business of the company." 15. To the similar effect are the decisions of Coordinate Benches of this Court in Kanarath Payattiyath Balrajh v. Raja Arora reported as 2017 SCC Online 7418, Har Sarup Bhasin v. M/s Origo Commodities India Pvt. Ltd. reported as 2020 SCC Online Del 9 and Chanakya Bhupen Chakravarti & Anr.....