TaxTMI 
TaxTMI 
2026 (3) TMI 1441
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.... 668/2020, CRL.M.C 644/2020 respectively], passed by the Magistrate's Court, Rohini Courts, Delhi. The petitioner also seeks quashing of all criminal proceedings against him emanating from the impugned summoning orders. A. FACTS 2. The relevant facts giving rise to the present petitions are as follows: A. The petitioner was appointed as an Additional Director in M/S Piyush Colonisers Limited ["the Company"] on 19.02.2015. B. The petitioner's designation was changed to an Independent Director [Non-Executive Director] on 30.09.2015. C. The Company entered into three separate agreements to lease dated 10.03.2016, 07.11.2017, and 09.11.2017. Under these agreements, three units bearing Nos. 101, 104, and 106 at a building named M/S Piyush Global, First Floor, Plot No. 5, YMCA Chowk, Main Mathura Road, Faridabad, Haryana - 121006, were let out to the Company at a fixed monthly rent. The Company issued multiple cheques to pay the rent, but they were dishonoured when presented. Details of the concerned cheques are tabulated as follows: Sr.No. Case No. Cheque No. Cheque Date Amount Date of dishonour 1. CRL.M.C. 2398/2019 229812 ....
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....counsel for the respondents. 4. The principal ground taken by Mr. Kher is that the complaint filed by the respondents does not make out the necessary grounds under Section 141 of the NI Act to hold the petitioner vicariously liable for the Company's offences under Section 138 of the NI Act. Mr. Kher submits that the complaints only contain vague and general assertions, and are devoid of specific averments required to show that the offence was within the knowledge/consent of the petitioner. To this effect, he relies upon a judgment of the Supreme Court in K.S. Mehta v. Morgan Securities and Credits Pvt. Ltd. 2025 SCC OnLine SC 492 [hereinafter, "KS Mehta"]., and a judgment of a coordinate Bench of this Court in Rahul Sood v. Government of NCT of Delhi 2025 SCC OnLine Del 2155 [hereinafter, "Rahul Sood"]. 5. Mr. Kher further submits that, when the offences were allegedly committed, the petitioner was an Independent Director, and was not concerned with the day-to-day affairs of the Company. He draws my attention to the Form DIR-12, which shows the petitioner's change in designation to Independent Director [Non-executive Director] with effect from 30.09.2015. The same is also ref....
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....that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section, - (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm." 9. The principles governing vicarious liability under Section 141 of the NI Act have recently been reiterated by the Supreme Court in KS Mehta. In the said judgment, the Supreme Court has considered its earlier decisions [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla [(2005) 8 SCC 89]; N.K. Wahi vs. Shekhar Singh [(2007) 9 SCC 481]; National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal [(2010) 3 SCC 330]; Pooja Ravinder Devidasani v. State of Maharashtra [(2014) 16 SCC 1]; Ashok Shewakramani v. State of A.P [(2023) 8 SCC 473]; Hitesh Verma v. Health Care at Home (India) (P) Ltd. ....
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....iability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company. (iii) Vicarious 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 the accused therein vicariously liable for the offence committed by the company along with averments in the petition containing that the 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 the 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 t....
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....three cases, the cheques have been signed by the Managing Director and not by any of the appellants." 21. In Hitesh Verma v. Health Care at Home (India) (P) Ltd., this Court held: "3. As the appellant is not a signatory to the cheque, he is not liable under Section 138 of the 1881 Act. As it is only the signatory to the cheque is liable under Section 138, unless the case is brought within the four corners of Section 141 of the 1881 Act, no other person can be held liable. ... 4. There are twin requirements under sub-section (1) of Section 141 of the 1881 Act. In the complaint, it must be alleged that the person, who is sought to be held liable by virtue of vicarious liability, at the time when the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company. A Director who is in charge of the company and a Director who was responsible to the company for the conduct of the business, are two different aspects. The requirement of law is that both the ingredients of sub-section (1) of Section 141 of the 1881 Act must be incorporated in the complaint. Admittedly, there is no assertion in the complai....
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....s mentioned, above were dishonoured, therefore the complainants have sent a notice dated 07.04.2017 to the accused persons calling upon them to make payment against the above mentioned dishonoured cheques within 15 days. The notice was duly served upon the accused persons between 08.04.2017 and 11.04.2017. The accused no. 1 Company was served on 08.04.2017 itself therefore accused no. 2 to 4 also stand served on 08.04.2017 though they have been separately also served. xxx xxx xxx 7, Accused nos. 2, 3 and 4 are the Directors of accused no. 1 and are personally responsible for the day to day management and are in control of all the affairs of accused no. 1 company. Time and again, there have been interactions with the accused persons relating to the transaction in question. As such, they are liable to be tried and punished for the offence committed by accused no. 1 under section 138 of the Negotiable Instruments Act in their personal capacity as well." 13. It is thus evident that the complaints do not contain any specific averments regarding the role of the petitioner, and instead merely make general and vague assertions that the petitioner, being a director of t....