TaxTMI 
TaxTMI 
2022 (2) TMI 1161
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....etropolitan Magistrate. 3. Learned counsel for the petitioner states that besides there being no averment in the complaint qua the petitioner, no legal notice was issued to the petitioner and notice of dishonour of cheque was issued only to the company. Thus, no cause of action for instituting the complaint under Section 138 of the N.I. Act arises against the petitioner. Further, the petitioner being neither In-charge nor responsible for the conduct of the affairs of the company nor signatory to the cheque, the impugned order be quashed. Reliance is placed on the decisions of Hon'ble Supreme Court reported as (2010) 3 SCC 330 National Small Industries Corporation Limited Vs. Harmeet Singh Paintal and Another; (1971) 3 SCC 189 Girdhari Lal Gupta Vs. D.H.Mehta and Another and (2005) 8 SCC 89 S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another. 4. Refuting the contentions of learned counsel for the petitioner, learned counsel for the respondent No. 2 submits that the present petition is liable to be dismissed on the ground of delay and laches. The impugned order was passed on 10th May 2019 and the present petition has been instituted in July 2021. He further states that the....
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....an Sharma as accused Nos. 1 to 5 respectively before the learned Metropolitan Magistrate. The accused No. 5 was since discharged, however, vide the impugned order dated 10th May 2019, accused Nos. 1 to 4 including the present petitioner who was impleaded as accused No. 4 were summoned. In the complaint, the respondent No. 2 stated that in the month of May-June 2017, KRF Ltd. approached respondent No. 2 for execution of certain printing jobs of Text Books and assured respondent No. 2 of timely payment. Respondent No. 2 agreed to execute the work and printed lakhs of books within the stipulated period. Pursuant to the invoices raised by the respondent No.2, part payment was made to the respondent No. 2 and for the remaining payment, a cheque bearing No. 000685 dated 3rd July 2017 for a sum of Rs.1,84,57,369/- drawn on the State Bank of India was issued in favour of the respondent No. 2. When the said cheque was presented by the respondent No. 2 on 5th July 2017, the same was dishonoured due to 'insufficient funds'. When the respondent No. 2 informed the company, request was made to not take legal recourse as the payment would be made in short time and the cheque could be represented ....
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....ious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make accused therein vicariously liable for offence committed by company along with averments in the petition containing that accused were in-charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi) If accused is a Director or an Officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint. (vii) 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 time. This has to be averred as a fact as there is no ....
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.... 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 time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) The answer to question (c) has to be in affirmative. The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminatin....