TaxTMI 
TaxTMI 
2025 (4) TMI 355
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....ent proceedings stem from complaints instituted by the Petitioner under Section 138 of the Negotiable Act, 1881 ["the NI Act"] in respect of cheques issued by Insion Private Limited (Accused No. 1 in the complaint). The Petitioner alleges that they had extended a loan of INR 1.50 crores to Insion Private Limited, and cheques were issued by the accused company towards repayment of the said amount. Upon dishonour of the cheques on presentation, the Petitioner initiated proceedings under the NI Act, arraying the Respondent, a former director of the company, as Accused No. 3. Upon service of summons, the Respondent preferred criminal revision petitions, which culminated in the passing of the impugned order by the Revisional Court. 3. Mr. Sameer Rohatgi, counsel for the Petitioner, argues that although Respondent had resigned from the post of director of Insion Private Limited (Accused No. 1) on 5th January, 2023, prior to the date of the alleged transaction dated 14th March, 2023 and 28th March, 2023, nonetheless, she remains liable under Section 141 of the NI Act. He submits that the complaints contain specific averments attributing continued involvement and responsibility to the R....
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....determined merely by resignation but by the role played in the company's functioning. The complaints disclose sufficient material to meet this threshold and therefore, the impugned order, which fails to consider this aspect, is unsustainable in law. Analysis 5. The Court has considered the submissions advanced and examined the material placed on record. It is well settled that a Court, while exercising jurisdiction under Section 482 of the Cr.P.C or Section 528 of the BNSS, must act with circumspection and refrain from interdicting criminal proceedings at the threshold, except in the clearest of cases-where the allegations, even if accepted in entirety, do not disclose the commission of any offence. In the considered view of this Court, the present case falls within that narrow category. Even assuming the allegations to be true, the complaints fail to disclose the essential ingredients necessary to attract liability against the Respondent under Section 138 read with Section 141 of the NI Act. The sequence of events leading to the filing of the complaints has already been summarised in the impugned order and need not be reiterated in detail. For the limited purpose of adjudica....
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....e in question was issued with the consent of the partner and it was with his knowledge, it was held sufficient to put the said partner to trial. Whereas in the present case, admittedly as per averments in the complaint itself, the revisionist/ A3 was an erstwhile director and she has not signed the cheque even as authorized signatory or in any other capacity. 11. In S.P. Mani's case, while dealing with the specific averment in the complaint, it was observed by the Hon'ble Supreme Court of India that "In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particulars about role of the Director in the complaint. It may do so having come across some unimpeachable, incontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of the process of the court. Despite the presence of basic averment, it may come to a conclusion that no case is made out against th....
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....ut a statutory exception to this general rule. It incorporates a deeming fiction, enabling the prosecution of not only the company that issued the dishonoured cheque but also those individuals who, at the material time, were in charge of and responsible for its business. Section 141 (1) reads as under: "141. Offences by companies.- If the person committing an offence under section 138 is a company, every person 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 and shall be liable to be proceeded against and punished accordingly:" [Emphasis Supplied] 9. However, in order to attract Section 141 (1), it must be shown that the person, at the time the offence was committed, was in charge of and responsible to the company for the conduct of the business of the company. The Supreme Court has repeatedly emphasised that this deeming provision must be applied with precision. Elucidating the principle of vicarious liability under Section 141 of the NI the Supreme Court in National Small Industries Corporation Li....
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....such specific pleadings, criminal liability under Section 141 of the NI Act cannot be fastened on non-executive directors or those not actively involved in the company's functioning at the time of the commission of the offence. [Pooja Ravinder Devidasani v. State of Maharashtra, (2014) 16 SCC 1]. 12. In State of NCT of Delhi through Prosecuting Officer, Insecticides, Government of NCT, Delhi v. Rajiv Khurana (2010) 11 SCC 469, the Supreme Court has held that where the person sought to be prosecuted is not a director but a non-director officer, the complaint must specifically spell out what duties were assigned to such officer and how, in what capacity, and to what extent he or she was responsible for the conduct of the business of the company. 13. However, the present case stands on an entirely different footing. It is not in dispute that the Respondent had resigned from the Board of Directors of the accused company prior to the date of issuance of the dishonoured cheques. This resignation is a matter of record. Consequently, at the time the offence is alleged to have been committed, the Respondent was neither a director nor held any official position in the company. She is a....