TaxTMI 
TaxTMI 
2023 (8) TMI 599
X X X X Extracts X X X X
X X X X Extracts X X X X
....laint filed by the second Respondent under Section 138 of the Negotiable Instruments Act, 1881 (for short, `the NI Act'). 2. By the impugned Judgment, the High Court has dismissed a petition filed by the appellants under Section 482 of the Code of Criminal Procedure, 1973 (for short, `the Code') for quashing the complaint. By the impugned Judgment, several petitions under Section 482 of the Code were decided arising out of different complaints filed by the same complainant. 3. At the outset, we may note here that in paragraph 10 of the impugned Judgment, the High Court has purported to quote the relevant paragraph from the complaint bearing CC No.1/2012, which is the subject matter of this appeal. We, however, find that the averments made in this complaint are different. 4. The main issue canvassed by the learned Senior Counsel appearing for the appellants is that though the appellants were directors of the first accused company at a relevant time, the mandatory averments which are required to be made in terms of sub-section (1) of Section 141 of the NI Act have not been made. The response of the learned counsel appearing for Respondent No.2 is that in substance, in paragr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he service of notice of demand is a condition precedent for filing a complaint in view of clause (c) of Section 138 of the NI Act. This is one ground on which the complaint must fail. 8. Now we come to the averments made in Paragraph 7. Firstly, it is stated that all the Directors were liable for the transactions of the accused No.1 company. Secondly, it is stated that all the accused were fully aware of the issuance of the cheques subject matter of the complaint, and they were also aware that the cheques will be dishonoured. Further, it is alleged that all the accused knew that there were no funds in the account of accused No.1 - company. 9. Sub-section 1 of Section 141 of the NI Act required the complainant to aver that the present appellants at the time of the commission of the offence were in charge of, and were responsible to the company for the conduct of the business of the company. In the present case, all that the second respondent has alleged is that the appellants were liable for transactions of the company and that they were fully aware of the issuance of the cheques and dishonour of the cheques. 10. Therefore, even if we decide to take a broad and liberal view....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 14. The appeals are accordingly allowed. CRIMINAL APPEAL NOS.880, 881 and 883 OF 2023 15. The facts leading to the filing of these three appeals are identical. The prayer made by the appellants under Section 482 of the Code of Criminal Procedure, 1973 for quashing the complaint filed by the second respondent has been rejected by the High Court by the impugned judgment. The present appellants have been arrayed as accused Nos.5 to 7 in the complaint filed by the second respondent under Section 138 of the NI Act. The accused No.1 in the complaint is a limited company. The accused No.2 is the Chairman of the company, and the accused No.3 is the Managing Director of the Company. The accused Nos. 5 to 7 have been described as directors of the accused No.1 company. The only issue which we are called upon to decide is whether the second respondent has incorporated the averments which are necessary to be incorporated in a complaint under Section 138 of the NI Act in view of sub-section 1 of Section 141 of the NI Act. The averments made in the complaints which are the subject matter of these three appeals are identical. We are referring to the averments made in one of the three com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Managing Director and not by any of the appellants. 19. Section 141 is an exception to the normal rule that there cannot be any vicarious liability when it comes to a penal provision. The vicarious liability is attracted when the ingredients of sub-section 1 of Section 141 are satisfied. The Section provides that every person who at the time the offence was committed was in charge of, and was responsible to the Company for the conduct of business of the company, as well as the company shall be deemed to be guilty of the offence under Section 138 of the NI Act. In the light of sub-section 1 of Section 141, we have perused the averments made in the complaints subject matter of these three appeals. The allegation in paragraph 1 of the complaints is that the appellants are managing the company and are busy with day to day affairs of the company. It is further averred that they are also in charge of the company and are jointly and severally liable for the acts of the accused No.1 company. The requirement of sub-section 1 of Section 141 of the NI Act is something different and higher. Every person who is sought to be roped in by virtue of sub-section 1 of Section 141 NI Act must be....