TaxTMI 
TaxTMI 
2026 (7) TMI 1437
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.... 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. 4. 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. 5. 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 the conduct of its business." Mere designation as a Director does not satisfy the statutory requirement. 6. It is further submitted that the expressions "was in charge of" and "was responsible to the Company for the conduct of the business of the Company" occurring in Section 141(1) cannot be read disjunctively. The Legislature has consciously employed the conjunctive word "and", making both requirements cu....
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.... the petitioner prays that the proceedings in the complaint is liable to be quashed. 11. In spite of due service, the opposite party/complainant is not being represented in the present case. The matter was then heard in full. 12. 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. Harihara Krishnan Vs. J. Thomas (Supra):- 27. By the nature of the offence under Section 138 of the Act, the first ingredient constituting the offence is the fact that a person drew a cheque. The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheq....
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.... 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 persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141." 13. In Shaleen Khemani & Ors. Vs. The State of West Bengal & Anr. reported in (2018) 1 C Cr. LR (Cal) 515,....
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....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. 17. 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. 18. This Court relies upon the judgment of the Supreme Court:- (i) In Sunil Todi & Ors. V. State of Gujarat & Anr. reported in 2021(14) SCALE, wherein the Court held:- "42. Section 141 of the NI Act stipulates that if a company is alleged to have committed an offence under Section 138, then every person who 'was in charge of, and responsible to, the company for the conduct of the business of the company‟ shall al....
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....4. 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 accused persons. (ii) In Sunita Palita vs M/s. Panchami Stone Quarry, Criminal Appeal No.....of 2022 (arising out of SLP (Crl.) No. 10396 of 2019) on 1 August, 2022, the Supreme Court held:- "36. The High Court rightly held that when a complaint was filed against the Director of a company, a specific averment that such person was in charge of and responsible for the conduct of business of t....
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....he 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 Paintal 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 business of the company, without anything more, does not fulfil the requirements of Section 141 of the NI Act." 19. Thus, it is clear from the materials on record, that the statements in the petition of complaint are only general in nature. It has also not been stated as who/which of the accuseds signed the cheque in this case. Disclosure of the name of the person drawing the cheque is one of the factual....
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....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-section 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 sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corpor....