TaxTMI 
TaxTMI 
2025 (6) TMI 1573
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....ancherry, a case relating to the commission of offence under Section 138 the Negotiable Instruments Act, 1881(in short, 'NI Act'). They are arraigned in the complaint in their capacities as the Managing Director and Authorised Signatory respectively, of the first accused Co-opearative Society by name 'The Kaduthuruthy Co-operative Rubber Marketing and Processing Society Limited No.1397'. 2. The complaint was about the dishonour of a cheque for Rs.1,63,800/- issued to the first respondent by the petitioners for and on behalf of the first accused Society towards payment of the amount due to the proprietary firm represented by the first respondent. Originally the complaint was filed before the Judicial First Class Magistrate Court, Vaikom. ....
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.... respondent vide order dated 30.08.2018. 5. The petitioners had filed C.M.P.Nos.843 & 844/2018 before the learned Magistrate seeking their discharge from the case. The above petitions were dismissed by the learned Magistrate holding that there is no provision to entertain a prayer for discharge in a summons trial. The learned Magistrate also observed that Section 141 of the NI Act cannot be applied at the initial stages of the complaint. 6. Heard the learned counsel for the petitioners, the learned Public Prosecutor representing Additional third respondent and the learned counsel for the first respondent. 7. Section 141 of the NI Act deals with the commission of offence under Section 138 of the said Act by a company. As per Sub-sec....
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....een established by the complainant (first respondent). 9. In Ashok Shewakramani v. State of Andhra Pradesh [2023 KHC 7037], the Hon'ble Supreme Court has held in paragraph Nos.19, 20 & 21 of the judgment as follows : 19. S.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-S.1 of S.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 S.138 of the NI Act. In the light of sub-S.1 of S.1....
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....he basis of such averment, one cannot conclude that the allegation of the second respondent is that the appellants were also responsible to the company for the conduct of the business. Only by saying that a person was in charge of the company at the time when the offence was committed is not sufficient to attract sub-S.1 of S.141 of the NI Act. Sub-S.1 of S.141 reads thus: "141. Offences by companies. - (1) If the person committing an offence under S.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 deeded to be guilty of the offence and shall be liable to be proceeded agains....
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.... the only option left with the High Court is quashment of those proceedings. Paragraphs Nos.8 & 9 of the aforesaid judgment are extracted hereunder : 8. (7.) The law enunciated in the decision in Ashok Shewakramani's case (supra) is that to maintain a complaint and to frame a charge under S.138 of the NI Act, there must be a specific averment against the person concerned that he was in - charge of, and responsible for the company concerned in the matter of conduct of its business. This position is now well settled and is being followed with alacrity. 9. (8.) Taking note of the law thus settled by this Court, we have carefully perused the complaints. Though, the learned counsel appearing for the second - respondent in a....