TaxTMI 
TaxTMI 
2026 (9) TMI 1
X X X X Extracts X X X X
X X X X Extracts X X X X
....138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act'). 3. The respondent no. 1 is company registered under Companies Act through its Directors namely Jose Ryan Agnelo Gomes Prazeres and Jose Ralph De Fatima Gomes Prazeres. The respondent no. 2 is also registered company under Companies Act. It was incorporated by respondent nos. 3 and 4 in year 2019. The respondent nos.1 and 2 entered into an agreement dated 01.06.2021 for share purchase and acquisition of business. The respondent nos.2 to 4 agrees to acquire 80% shares holding of equity of respondent no. 1 Company. The terms were settled on 01.05.2021, which were subsequently altered and modified by final term-sheet signed on 07.05.2021. As per final term-sheet dated 07.05.2021, respondent nos.2 to 4 agreed to purchase 80% of share holding of respondent no. 1 Company for acquisition price of Rs. 80,00,000/- out of which sum of Rs. 3,00,000/- was paid at the time of signing of agreement and balance was to be paid as per payment schedule of 11 installments. The particulars of cheques which are subject matter of complaints are given as under: Dated Return Memo Dated Amount Cheque No. O.A. No.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ef tenure as Director from 30.09.2022 to 27.06.2023. The petitioner did not perform any executive function nor he was responsible for day to day management of affairs of respondent no. 2 Company. The complaint did not disclose specific averments qua petitioner nor does it attribute specific role in respect of cheques in question. Relying upon observation of this Court in case of Padmakar Dattatray Matkar Vs. Malani Combines and Others 2025 SCC OnLine Bom 1910., and observation of Supreme Court in cases of Kamalkishor Shrigopal Taparia Vs. India Ener-Gen Private Limited and Another (2025) 7 SCC 393., and K. S. Mehta Vs. Morgan Securities and Credits Private Limited (2025) 7 SCC 615., he submits that criminal liability cannot be fastened upon every person associated with company. Section 141 of N.I. Act has to be strictly complied with and person upon whom such liability is sought to be fastened must know what is being attributed to him. It would not be sufficient to make bald cursory statement in complaint that Director is in charge of and responsible to company for conduct of business of company without anything more as to role of Director. By inviting attention of this Court to im....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hing that is peculiarly within their knowledge and it is for them to establish at trial such a restriction or to show that at the relevant time they were not incharge of affairs of the company. By relying upon observations of Supreme Court in case of HDFC Bank Limited Vs. State of Maharashtra and Anr. 2025 INSC 759 he submits that if substance of allegation made in complaints fulfill requirements of Section 141 of NI Act, complaint has to proceed and is required to be tried with. While construing complaint, hyper-technical approach should not be adopted and laudable object of preventing bouncing of cheques and sustaining credibility of commercial transactions had to be borne-in-mind. 7. Having considered submissions advanced by learned Advocates appearing for respective parties, core issue that arises for consideration before this Court is whether averments in complaint are sufficient to issue process against petitioner or prosecute petitioner for offence punishable under Section 138 read with 141 of NI Act. Careful reading of complaint depicts that initially agreement for share purchase and acquisition of business was entered into between respondent no. 1 and respondent no. 2 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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." 8. Plain reading of aforesaid provision indicates that in case of offences by Company, every person who, at the time the offence was committed, was in charge of, and was responsible to company for conduct of business of company, shall be deemed to be guilty of offence and shall be liable to be proceeded against. Sub-clause (2) of Section 141 states that notwithstanding anything contained in sub-section (1), in case of offence by Company, once it is proved that the offence has been committed with the consent or connivance of any director, manager, secretary or other officer of company, such director, manager, secretary or other officer, shall also be deemed to be guilty of that offence and liable to be proceeded against. 9. In case of Hitesh Verma Vs. Health Care at Home India Private Limited and Others (2025) 7 SCC 623., Supreme ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (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 the complaint. (vii) 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." 11. In case of K. S. Mehta (supra), Supreme Court reiterated principles laid down in case of Hitesh Verma (supra) and observed that complaints lacking specific averments, that establish direct nexus between financial transactions in question on involvement of accused in company's financial affairs, accused cannot be held vicariously liable under Section 141 of NI Act. 12. In case of HDFC Bank Limited (supra) Supreme Court relying upon observations in case of Monaben Ketanbhai Shah and Another vs. State of Gujarat and Others (2004) 7....