TaxTMI 
TaxTMI 
2021 (7) TMI 117
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....ffence under Section 138 of the Negotiable Instruments Act. 3. It is alleged in the complaint that the complainant is a wholesale dealer in gold and jewellery business run in the name of M/s. Sanghi Jewellers Private Limited. A1 is the Jewellery Shop situated at Sapthagiri Complex, KPHB Colony, Hyderabad. A2 is the Managing Director of the A1 company and signatory of the subject cheques. A3 to A9 are the Directors of A1 company. In the month of July, 2010, A2 to A9 visited the complainant's jewellery shop at Hyderguda, Hyderabad. A2 to A9 represented that they are interested in doing business transactions in the complainant company. They also stated that the complainant company is known for designer jewellery adhering to the contempo....
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....cably but failed to fulfill their commitment. 5. It is alleged that at the time of issuing cheques, the accused were well aware there were no sufficient funds in the accounts maintained by them in the bank. After statutory notice dated 28.07.2010 was issued A1 to A9 calling upon them to pay cheque amount within 15 days, notices were received by A2 to A5 and A7 to A9 on 30.07.2010. The legal notice sent to A1 and A6 was returned back with an endorsement 'not claimed'. A1 company along with A2 to A9, who are Directors, thus, committed offence punishable under Section 138 of the Negotiable Instruments Act. 6. The petitioners/accused contend that all of them have resigned from A1 company with effect from 02.07.2010 and Form 32 to ....
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....le Instruments Act. The petitioners are neither signatory of the cheques nor in any way responsible for issuance of the subject cheques. Accused No. 2 is said to be the Managing Director, who signed the cheques. 9. The prosecution under Section 138 of the Negotiable Instruments Act is against persons who have issued the cheque, which is later dishonored. Mere assurance of payment or selection of jewellery cannot be the basis to rope in the petitioners. It is vaguely stated in the complaint that the petitioners are directors and responsible for the day-to-day affairs of the A1 company. But in the given facts and circumstances of the case and particularly the uncontroverted claim of the petitioners that they are household ladies, this Cour....
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.... But the complaint should spell out as to how and in what manner Respondent 1 was in charge of or was responsible 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 a sufficient or adequate fulfillment of the requirements Under Section 141. (emphasis supplied) 27. Unfortunately, the High Court did not deal the issue in a proper pe....