ORDER :- The petition is filed under Section 482 Cr.PC seeking to quash proceedings against the petitioners-A4 and A5 in STC No.83 of 2006 on the file of III Metropolitan Magistrate, LB Nagar, RR District. 2. Heard the learned Counsel for the petitioners and the respondents. Perused the records. 3. The first respondent herein filed a complaint before the learned Magistrate against the petitioners and 3 others, alleging offence under Section 138 of the Negotiable Instrument Act (for short 'the Act'). According to the first respondent, he was engaged in the business of manufacture and sale of pharmaceutical formulations and A.1 - a Private Limited Company, represented by A2 to A5 as its Directors, used to place orders for supply of pharmaceuticals with the complainant's Company and in that connection, A.1 Company became due in a sum of Rs.34,00,000/- by March 2005 for the Financial Years from 2002-2005. It is further averred by the complainant that A.1 Company represented by the 2nd accused settled the accounts on 18.3.2005 and entered into Memorandum of Understanding (for short 'MoU') on the same day by fixing payment schedule and also delivery of further consignments. As per the said MoU, A.1 Company represented by A.3 issued cheques worth Rs.100.00 lakhs, which included the outstanding liability of Rs.34,00,000/- and further consignment worth of Rs.66,00,000/-. It is further alleged that when the complainant's Company presented the first cheque for Rs.5,00,000/- dated 23.3.2005 as per MoU for encashment through its banker, Syndicate Bank, Habsiguda Branch, it was dishonoured with endorsement 'refer to drawer'. When contacted on phone, Al Company represented by A2 to A5, expressed financial difficulty and requested the complainant to present all the cheques in the month of September, 2005. When the complainant presented three cheques of Rs.5,00,000/- each issued by Al dated 30.5.2005, 30.5.2005 and 10.6.2005 to complainant's banker ICICI Bank, for encashment, the cheques were dishonoured with endorsement 'payment is stopped by the drawer'. The complainant issued legal notice dated 6.12.2005 to A.1 to A5, which were served on 12.12.2005, but the accused did not pay the amount and gave a reply dated 12.1.2006 with false allegations. 4. Learned Magistrate has taken cognizance of the complaint as STC No.83 of 2006 and issued process against all the accused. Aggrieved by the same, A.4 and A5 filed the present petition seeking quashing of further proceedings against them. 5. 4. Learned Magistrate has taken cognizance of the complaint as STC No.83 of 2006 and issued process against all the accused. Aggrieved by the same, A.4 and A5 filed the present petition seeking quashing of further proceedings against them. 5. The main contention of the learned Counsel for the petitioners is that A.4 and A.5 who are wives of A.3 and A.4 respectively, though Directors of the Company, are not in-charge of the affairs of A.1 Company nor responsible for the conduct of its business and they are only sleeping partners and hence, no liability can be fastened on them, in the absence of any specific allegations in the complaint as to the role played by them in the alleged offences. 6. Learned Counsel for the first respondent on the other hand contended that the petitioners-A.4 and A.5 being the Directors of Al Company, are liable on par with A.2 and A.3 and whether or not they are in-charge of the affairs of the Company or only sleeping partners is a matter to be considered on evidence at the time of trial. 7. Section 141 (1) of the Act states as follows: "(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 deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. " 8. A perusal of the above provision would make it clear that when the Company is al1eged to have committed offence under 'Section 138 of the Act, it is only such person, who was in-charge and was responsible to the Company for the conduct of the business of the Company, shal1 be deemed to be guilty of the offence and liable to be proceeded against. In the present case, except making a bald allegation in Para 4 of the complainant that A.1 Company is represented by A.2 to A.5 Directors and they are involved in day-today affairs of the Company and liable for all the acts of A.1 Company, no specific allegation is made as to the nature and extent of liability of A.4 and A.5 or role played by them in managing the affairs of the Company. Before filing the complaint, a statutory legal notice was got issued by the complainant on 6.12.2005 to which the accused including the petitioners-A A and A.5 got issued a reply notice on 12.1.2006, wherein, it was vehemently denied that A.4 and A.5 are concerned with the day-to-day affairs of the Company or that they are liable for all the acts of the Company. It was further averred in the reply notice that A.4 and A.5 are sleeping directors and have no concern with the day-to-day affairs of the Company, much less issuance of cheques in due course of business, which was looked after by other directors. In spite of such a specific allegation having been raised by AA and A.5 even in the reply notice, the complainant has not averred anything in the complaint as to the nature, scope and extent of the involvement of the petitioners-A A and A.5 in managing the affairs of the Company or conduct of its business. Even the said allegation in the reply notice that A.4 and A.5 are only sleeping partners and have no concern with the day-to-day affairs of the Company is also not denied or countered in the complaint. Even in the sworn statement of K. Prasad Reddy, Sales Executive, who filed the complaint, representing the first respondent Company, there is absolutely no reference to any involvement of the petitioners A.4 and A.5 or as to how they are responsible, except stating that A.1 is a Private Limited Company and A.2 to A.5 are its Directors. It is not the case of the complainant that the petitioners-A.4 and A.5 were also transacting the business on behalf of A.I Company with the complainant's Company. Admittedly, even according to the complainant, the cheques were issued only by A.2 or A.3 representing A.1 Company. It is significant to note that even according to the complainant, there was a MoU entered into between the complainant's Company and Al Company, wherein, terms of payment schedules and delivery schedules were agreed upon. The said MoU copy of which is filed shows that A.1 Company was represented by its Managing DirectorA.2 and it was signed by him only on behalf of A.1 Company. Admittedly, the petitioners-A.4 and A5 are neither parties nor signatories to the said MoU. The said MoU copy of which is filed shows that A.1 Company was represented by its Managing DirectorA.2 and it was signed by him only on behalf of A.1 Company. Admittedly, the petitioners-A.4 and A5 are neither parties nor signatories to the said MoU. In the complaint and also in the sworn statement of the representative of the complainant's Company, it is stated that Al represented by A2 settled the accounts on 18.3.2005 and MoU was entered into on that day by fixing payment schedule and delivery schedule of further consignments. It is further pleaded that Al represented by A3 issued cheques for Rs.100,00,000/- which included outstanding liability of Rs.34,00,000/ -. It is further stated that when the cheques were dishonoured, A2 was informed on phone about the same and it was he who requested the complainant to present all the cheques in September 2005. As per the averments in the statutory legal notice, complaint and also sworn statement of the representative of the complainant, it was only A.2 and A.3, who were dealing with the complainant on behalf of A.1 Company. There is absolutely nothing on record to show that the petitioners-A.4 an A.5 have played any part in the subject transactions with the complainant's Company. 9. Learned Counsel for the first respondent-complainant relied upon a decision in N Rangachari v. B.S.N.L., 2007 (2) ALD (Crl.) 112 (sq, wherein, the apex Court held as follows : " .. .. .. .. Therefore, a person in the commercial world having a transaction with a company is entitled to presume that the Directors of the company are in charge of the affairs of the company. If any restrictions on their powers are placed by the memorandum or articles of the company, it is for the directors to establish it at the trial. It is in that context that Section 141 of the Act provides that when the offender is a company, every person, who 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, shall also be deemed to be guilty of the offence along with the company. It appears to us that an allegation in the complaint that the named accused are Directors of the Company and of their being in charge of the company." It was further held as follows: "A person normally having business or commercial dealings with a company, would satisfy himself about its creditworthiness and reliability by looking at its promoters and Board of Directors and the nature and extent of its business and its memorandum or Articles of Association. Other than that, he may not be aware of the arrangements within the company in regard to its management, daily routine, etc. Therefore, when a cheque issued to him by the company is dishonoured, he is expected only to be aware generally of who are in charge of the affairs of the company. It is not reasonable to expect him to know whether the person who signed the cheque was instructed to do so or whether he has been deprived of his authority to do so when he actually signed the cheque. Those are matters peculiarly within the knowledge of the company and those in charge of it. So, all that a payee of a cheque that is dishonoured can be expected to allege is that the persons named in the complaint are in charge of its affairs. The Directors are prima facie in that position." 10. In the above case, it was found on facts that at the time of complaint, two dishonoured cheques were issued by the appellants therein, who were the Directors of the Company and were in charge of the affairs of the Company in view of the specific averments made therein. The above decision is not applicable to the facts of the present case for the reason that except making a bald averment in the complaint that A.2 to A.5 are the Directors and are in charge of affairs of the Company, there is no specific allegation as against the petitioners-AA and A.5 as to how they are liable for the commission of the alleged offences or responsible for the issuance of the dishonoured cheques. 11. In SMS Pharmasceutical Ltd. v. Neeta Bhalla and another, 2005 (2) ALD (Crl.) 595 (sq, wherein the apex Court held as follows: ". . .. . . ..Merely being a Director of a Company is not sufficient to make the person liable under Section 141 of the Act. 11. In SMS Pharmasceutical Ltd. v. Neeta Bhalla and another, 2005 (2) ALD (Crl.) 595 (sq, wherein the apex Court held as follows: ". . .. . . ..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." 12. The petitioners-A.4 and A.5 are neither Managing Directors in charge of the Company nor they responsible for the conduct of the business nor they are signatories of the cheques which were dishonoured. The fact that MoU was entered into by the complainant with A.I Company, in which, A.I was represented by only A.2 and also the fact that the disputed cheques were issued only by A.3 clearly indicate that the complainant was aware that A.2 and A.3 were, in charge of the affairs of A.1 Company. It is not as though the petitioners-A A and A.5 have taken the said plea for the first time in the present application that they were only sleeping partners and have no concern with the affairs of A.1 Company. Even in the reply notice, which was issued by them in response to the statutory notice issued by the complainant prior to filing of the complaint, they have categorically denied that they were in charge of the affairs of A.1 Company and further stated that they were only sleeping partners having no concern with the management of the day-to-day affairs of A.1 Company, much less issuance of the cheque. The complaint as well as sworn statement of the representative of the complainant are totally silent as to how the petitioners-A.4 and A.5 can also be made liable nor is there any averment therein as to how the petitioners were serving A.1 Company. 13. The complaint as well as sworn statement of the representative of the complainant are totally silent as to how the petitioners-A.4 and A.5 can also be made liable nor is there any averment therein as to how the petitioners were serving A.1 Company. 13. In Raghu Lakshminarayanan v. Fine Tubes, 2007 (I) ALD (Crl.) 987 (sq, the Apex Court reiterated the view taken in SMS Pharmaceutical's case (supra), to the effect that the complaint must contain the requisite averments to bring the case within the purview of Section 141 of the Act so as to make some persons other than Company vicariously liable therefor. 14. In Sara) Kumar Poddar v. State (NCT of Delhi) and another, 2007 (2) SCALE 36 , the Apex Court held that 'when there is no averment in the complaint as to how and in what manner the appellant was responsible for the conduct of 'the business of the Company or otherwise responsible to it in regard to its functioning, when he has not issued any cheque and when it is not stated how he was responsible for the dishonour of the cheque and the allegations made in the complaint even if are taken to be correct in their entirety do not disclose any offence as against the appellant the proceedings against him are liable to be quashed'. It was further held in the above decision that 'with a view to make the Director of a Company vicariously liable for the acts of the Company, it was obligatory on the part of the complainant to make specific allegations as are required in law.' 15. In the above decision, the earlier decision in SMS Pharmaceutical's case supra), was followed, wherein it was held that 'merely being described as a Director in a Company is not sufficient to satisfy the requirement of Section 141 of the Act'. 16. In Monaben Ketanbhai Shah and another v. State of Gujarat and others, AIR 2004 SC 4274 = 2004 AILD 428 (SC), the apex Court held as follows : "Section 141 does not make all partners liable for the offence. The criminal liability has been fastened on those who, at the time of the commission of the offence, was in charge of and was responsible to the firm for the conduct of the business of the firm. The criminal liability has been fastened on those who, at the time of the commission of the offence, was in charge of and was responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are not required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not incharge of and were not responsible to the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint." 17. In the present case also, even in the reply notice, the petitioners-A.4 and A.5 have stated that they are only sleeping partners, having no concern with the day-today affairs of the business of the Company. In spite of it, no averment was made in the complaint to the effect that the petitioners- A.4 and A.5 are not the sleeping partners to show the nature and extent of their involvement in the affairs of the Company so as to fasten the criminal liability on them vicariously. No presumption can therefore be drawn that the petitioners-A.4 and A.5 are also aware of the transactions involving issuance of the subject cheques and their dishonour. 18. Learned Counsel for the first respondent-complainant contended that the question as to whether or not the petitionersA.4 and A.5 are only sleeping partners and so they were not incharge of the business of the Company in any manner may, arise for consideration only at the time of trial, but not at this stage. 18. Learned Counsel for the first respondent-complainant contended that the question as to whether or not the petitionersA.4 and A.5 are only sleeping partners and so they were not incharge of the business of the Company in any manner may, arise for consideration only at the time of trial, but not at this stage. The said contention is untenable in view of the principles laid down by the Apex Court in the above decisions that the complainant has to make necessary averments in the complaint and establish that the petitioners-A.4 and A.5 are also in charge of the affairs of the Company and therefore they are also liable on par with other directors-A2 and A3. Mere mentioning in the compliant that A.2 to A.5 are the Directors of A.1 Company and they are all incharge of the affairs of the Company, would not suffice in factual matrix of the present case, particularly, in the back drop of the reply notice issued by A.4 and A.5 wherein they have specifically asserted that they are only sleeping partners and had no concern with the day-to-day affairs of the business of A.1 Company. 19. In SMS Pharmaceutical's case (supra), the Apex Court in Para 14 held as follows : ''The conclusion is inevitable that the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable." 20. In the present case, mere holding of an office by A.4 and A.5 in A.1 Company as Directors thereof, does not render them liable and the complainant has to show the acts of omission or commission on the part of the petitioners-A.4 and A.5 or their conduct vis-a-vis A.1 Company attracting the ingredients of Section 141 of the Act. The averment that the petitionersA4 and A.5 are also Directors of A.1 Company and are therefore liable on par with A.2 and A.3, would not be sufficient to render the petitioners vicariously liable for the penal consequences of the acts of omission or commission on the part of A.2 and A3, who are admittedly, the representatives of A.1 Company and are transacting with the complainant's Company on behalf of A.1 Company. 21. 21. In the circumstances and in the light of the principles laid down in the above decisions and having regard to the factual matrix of the present case, it is held that in the absence of any specific averments in the complaint or in the sworn statement of the representative of the complianant's Company regarding involvement of the petitioners-A.4 and A.5 in the said transactions there being nothing on record to show that the petitioners-A.4 and A.5 were actually incharge of the affairs of A.1 Company or responsible for the conduct of the Company, further proceedings against the petitioners-A.4 and A.5 are not sustainable and it is considered a fit case to invoke the inherent powers of this Court under Section 482 Cr.PC and quash proceedings against the petitioners and accordingly, the proceedings against the petitioners-A.4 and A.5 in STC No.83 of 2006 on the file of III Metropolitan Magistrate, L.B. Nagar, R.R. District are quashed. 22. In the result, the criminal petition is allowed accordingly.