TaxTMI 
TaxTMI 
2021 (10) TMI 140
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.... India challenge the order dated 13th October, 2017 (In Writ Petition No. 3710/2018) and order dated 11th September, 2017 (in Writ Petition No. 3711/2018) passed in C.C. No. 7854/SS/2016 and C.C. No.9698/SS/2016 respectively by the Metropolitan Magistrate, Mumbai by which the petitioners were summoned as accused in the complaint filed by the respondent no.2 for alleged offences punishable under Section 138 read with Section 141 of the Negotiable Instruments Act ("Act" for short). 3. This Court vide order dated 16th August, 2019 rejected the petition qua petitioners no.1 to 6 and 8. 4. Insofar as, petitioners no.7, 9 and 10 are concerned, it was argued that these petitioners being "Independent Directors" could not have been prosecuted ....
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.... conduct of business of the company and is in-charge of the business of the company is vicariously liable by reason only of his fulfilling the requirements of sub-section (1). It is thus submitted, if the person responsible to the Company for the conduct of business, was not in charge, of conduct of the business of the Company, then he can be made liable under Section 141(2) of the Act, only if the offence was committed with his consent or connivance or as a result of negligence. It is argued that, the complaint, does not aver that either the offence was committed with consent, knowledge or connivance of petitioner no.11 nor it is alleged that, offence was result of negligence on the part of petitioner no.11 nor there is a specific averm....
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.... the case under Section 141(1) of the Act. No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under Section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that sub-section. (iv) Other officers of a company cannot be made liable under sub-section (1) of Section 141. Other officers of a company can be made liable only under sub-section (2) of Section 141, by averring in the complaint, their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence. 10. In this case, petitioner no.11 i....
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....ement dt.31-July-2013 by and between L&T Infrastructure Finance Co. Ltd. and the Complainant; L&T Infrastructure Finance Co.Ltd., being Assignor, has assigned the Loan of Rs. 68,97,39,582/- (out of Loan of Rs. 100 Crores) to the Complainant being Assignee. The Complainant further states that vide letter dt.01-Aug-2013, the Complainant informs to Accused No.1 regarding execution of the Assignment Agreement and Accused No.9 being Authorised Signatory of Accused No.1 and with the knowledge and consent of Accused No.2 to 8 and 10 to 13 has acknowledged the same. The Complainant further states that there was no dispute about the repayment terms and conditions of the Assignment Agreement entered into between Complainant and L&T Infrastructure Fin....
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....ises. To put it differently, to be vicariously liable under sub- section (1) of Section 141, a person should fulfill the 'legal requirement' of being a person in law (under the statute overning companies) responsible to the company for the conduct of the business of the company and also fulfill the 'factual requirement' of being a person in charge of the business of the company." 14. Therefore, in my view, in absence of averments in the complaint, that petitioner no.1 is also "in charge" of the business of the company, the case could not fall under Section 141(1) of the Act. This takes me to find out whether, petitioner no.11 being Officer of the Company could be made liable under subsection 2 of Section 141. When verified, the a....