TaxTMI 
TaxTMI 
2026 (7) TMI 640
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....namely, Credforce Asia Limited. The petitioner has been arraigned solely on account of his designation as a Director. The complaint neither alleges that the petitioner was in charge of and responsible for the conduct of the business of the Company at the relevant time nor attributes any role to him in the transaction culminating in the dishonour of the cheque. 4. Learned senior counsel Mr. Ganguly has argued on behalf of the petitioner on filing written notes that in the present case the complainant has not satisfied the mandatory requirements under Section 141 of the Negotiable Instruments Act, 1881. 5. It is further argued that Section 141 of the Negotiable Instruments Act creates a legal fiction by extending vicarious criminal liability to persons who have not personally committed the offence under Section 138. Being a penal provision creating vicarious liability, it is settled law that the provision must receive strict construction. 6. Mr. Ganguly further states that the sine qua non for invoking Section 141(1) is a specific averment in the complaint that, at the time of commission of the alleged offence, the accused was "in charge of and responsible to the Company for....
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.... stated that the complaint does not disclose that the petitioner negotiated with the complainant, authorised the issuance of the cheque, participated in the underlying transaction, or exercised control over the business of the Company in relation to the transaction in question. In the absence of any such allegations, continuation of the criminal proceeding against the petitioner is wholly unwarranted and as such the petitioner prays that the proceedings in the complaint is liable to be quashed. 12. In spite of due service, the opposite party/complainant is not being represented in the present case. The matter was then heard in full. 13. In Pawan Kumar Goel v. State of U.P & Anr. reported in 2022 (16) SCALE, the Supreme Court held:- "22. The observations made in the aforesaid judgment is also a complete answer to the arguments advanced by learned counsel for the appellant that in the absence of any prohibition under the NI Act, the amendment in the complaint is permissible and the impleadment of an additional accused subsequent to filing of the complaint, would not be barred. At this juncture, we may also refer to the following observations made in the case of N. Hari....
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....equirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to question posed in sub-para (b) has to be 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 pers....
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....he company, at all material point of time. No specific allegation or any specific act has been attributed to the said accused persons individually. It appears that even the allegation of the cheque being issued has been stated as being issued "by accused persons". The complainant has also stated that the complainant reposed sufficient trust and faith on the representation of the accused persons and accepted the cheque as good as cash. Nowhere in the petition of complaint has the complainant stated as to which of the directors/accused persons had signed the cheque. 18. The demand notice sent by the learned advocate of the complainant was also sent to all the accused persons. As such it appears that there is no specific allegation or averment in the petition of complaint as to which of the accused persons had signed the cheque and was thus responsible for the said cheque being dishonoured. The complainant/opposite party also did not appear before this Court in spite of being served which has been recorded in the order dated 29.08.2025 in this case. As such it appears that there is no specific averment against any of the petitioners in the present case. 19. This Court relies upo....
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....on, namely, where a group of persons that guide the business had criminal intent, that is to be imputed to the body corporate and not the vice versa. Otherwise, there has to be a specific act attributed to the Director or any other person allegedly in control and management of the company, to the effect that such a person was responsible for the acts committed by or on behalf of the company." 44. The test to determine if the Managing Director or a Director must be charged for the offence committed by the Company is to determine if the conditions in Section 141 of the NI Act have been fulfilled i.e., whether the individual was in-charge of and responsible for the affairs of the company during the commission of the offence. However, the determination of whether the conditions stipulated in Section 141 of the MMDR Act have been fulfilled is a matter of trial. There are sufficient averments in the complaint to raise a prima facie case against them. It is only at the trial that they could take recourse to the proviso to Section 141 and not at the stage of issuance of process." In the present case there is no sufficient averments nor a prima facie case against the accus....
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....mpany. As held by this Court in Pooja Ravinder Devidasani v. State of Maharashtra and Anr. (supra) a non-Executive Director is not involved in the day-to-day affairs of the company or in the running of its business. Such Director is in no way responsible for the day-to-day running of the Accused Company. Moreover, when a complaint is filed against a Director of the company, who is not the signatory of the dishonoured cheque, specific averments have to be made in the pleadings to substantiate the contention in the complaint, that such Director was in charge of and responsible for conduct of the business of the Company or the Company, unless such Director is the designated Managing Director or Joint Managing Director who would obviously be responsible for the company and/or its business and affairs. 46. As held by this Court in National Small Industries Corporation Ltd. v. Harmeet Singh Paintal4 quoted with approval in the subsequent decision of this Court in Pooja Ravinder Devidasani v. State of Maharashtra and Anr. (supra) the impleadment of all Directors of an Accused Company on the basis of a statement that they are in charge of and responsible for the conduct of the bus....
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....f the NI Act. The second allegation in the complaint is that the appellants are busy with the day-to-day affairs of the company. This is hardly relevant in the context of subsection 1 of Section 141 of the NI Act. The allegation that they are in charge of the company is neither here nor there and by no stretch of the imagination, on the 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 subsection 1 of Section 141 of the NI Act. Sub-section 1 of Section 141 reads thus: "141. Offences by companies.- (1) 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 deeded to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this subsectio....