K. Usha & Another v. M/s. Sundaram Finance Ltd. Rep. by its Authorized Signatory N. Narayanan, Chennai
2010-04-03
C.T.SELVAM
body2010
DigiLaw.ai
Judgment :- The petitioners, who are the sixth and seventh accused in this case for an alleged offence under Section 138 r/w 141 of the Negotiable Instruments Act pending in C.C. No. 17554 of 2004 on the file of the XIII Metropolitan Magistrate, Egmore, Chennai, seek to quash the proceedings as against them. 2. I have heard the learned counsel for the petitioners and the learned counsel for the respondent. 3. A perusal of the complaint reveals that the petitioners are arrayed in their capacity as the Directors of the Company. Except the bald averments that the petitioners are the Directors and responsible also in the conduct of the day to day affairs of the first accused company, nothing more is informed of the petitioners involvement in the case. The Honourable Apex Court in SMS Pharmaceuticals v. Neeta Bhalla and another, 2005 (5) CTC 65: 2005(4) Crimes 34, has held in Paragraph 20 as follows: (a)"It is necessary to specifically aver in a complaint under Section 141, that at the time offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement 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.
(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." 4. The averment that the petitioners / Directors were in-charge of and responsible to the company at the time of commission of the offence, which is an absolute requisite has not been made in this case. 5. For the reasons above said, Criminal Original Petition shall stand allowed and the proceedings in C.C. No. 17554 of 2004 on the file of the XIII Metropolitan Magistrate, Egmore, Chennai shall stand quashed in so far these petitioners are concerned. Consequently, the connected miscellaneous petition is closed.