ORDER : Shri Satish Chand Bagadiya, Senior Advocate with Shri Kapil Jain, Advocate for the applicant. None for the non-applicant, though served. Heard. This order shall also govern the disposal of M.Cr.C. No. 2201/2009 (Naveen Kumar Kedia vs. Smt. Pammi Sobthi) and M.Cr.C. No. 2202/2009 (Naveen Kumar Kedia vs. Manvendra Singh). 2. In this petition under section 482, Code of Criminal Procedure, the applicant who was appointed as Director of accused No. 1 (Kedia Castle Dalleon Industries Ltd.) on 1st April, 2000 and resigned from the post of Director on 5th November, 2002 is praying for quashment of complaint and proceedings of proceedings of criminal cases pending against him in the Court of Judicial Magistrate First Class, Bhopal for an offence under section 138, Negotiable Instruments Act, 1881 (in short 'N.I. Act') on the ground that he had resigned in 2002 could not be a person in-charge of the company in 2005 when the cheque was dishonored. He had no say in the matter nor he could ask the company to pay the amount and could not have been made responsible for payment of the cheque on behalf of the company or otherwise and no offence can be registered against him nor he cannot be made accused for the offence when he was not a Director of the Company at the relevant time. 3. The basic facts of the matter is not in dispute. 4. The appellant herein was appointed as Additional Director of a company known as Kedia Castle Dalleon Industries Ltd. on 1st April, 2000 as is evident from Form No. 32, in which particulars of appointment of Directors and Managers and changes among them in pursuance to section 303(2) of the Indian Companies Act, 1956(Annexure-A-2) has been mentioned. The applicant thereafter resigned from the post of Director on 5-11-2002 as is evident from Form No. 32 dated 20th November, 2002 in which it is mentioned that the applicant ceased to be Director due to resignation. 5. The case of the complainant is that on 5th September, 1995 M/s Kedia Castle Dalleon Industries Ltd. took a loan of Rs. 4,00,000/- for investment from the complainant. The cheque of the complainant was received by the accused No.5-Dr. Shivendra Shrivastava, Director of the said company and issued a receipt on 5th September, 1995 itself. 5. The case of the complainant is that on 5th September, 1995 M/s Kedia Castle Dalleon Industries Ltd. took a loan of Rs. 4,00,000/- for investment from the complainant. The cheque of the complainant was received by the accused No.5-Dr. Shivendra Shrivastava, Director of the said company and issued a receipt on 5th September, 1995 itself. It is averred in the complaint that in discharge of this loan/debt which was received by accused No. 5-Dr. Shivendra Shrivastava who is alleged to be Director of Accused No. 4 (Kedia Distillery Ltd.), a post cheque bearing No. 559957 and 25th July, 2005 drawn on State Bank of India Industrial Estate Branch, Bhilai was given by the accused persons. On 25-7-2005 when the said post dated cheque was presented for encashment, the same was returned after being dishonoured with a remark "Funds Insufficient" on 3-8-2005. The complainant has sent a notice through his counsel to the accused persons on 23-8-2005 under registered post and UPC which was returned with an endorsement refused to take/does not reside on 30-8-2005 and thereafter the complaint under section 138 of the N. I. Act was filed before the Judicial Magistrate First Class, Bhopal. 6. The non-applicants has filed a complaint against five alleged accused persons namely; (i) M/s Kedia Castle Delleon Industries Ltd., (ii) Naveen Kedia (Managing Director of M/s Kedia Castle Delleon Industries Ltd.), (iii) Mr. Rajeev Newatia (Authorised Signatory of Kedia Great Galleon Ltd.), (iv) Kedia Distillery Ltd., (v) Dr. Shivendra Shrivastava (Director of Kedia Distillery Ltd.). For committing an offence under section 138 read with section 141 of the N. I. Act. 7. Accused No. 1-M/s Kedia Castle Delleon Industries Ltd., which is a company duly registered under the Indian Companies Act, 1956 and having its registered office at Calcutta. Accused No. 4-Kedia Distillery Ltd. is also a separate company duly registered under the Companies Act having its registered office at Indore. 8. As per averments made in the complaint, it is not in dispute that a post cheque bearing No. 559957 dated 25-7-2005 was given by accused No. 1 M/s Kedia Castle Delleon Industries Ltd. The said cheque was dishonoured on 3-8-2005. The complainant-company sent a legal notice to the accused persons through its Advocate on 23-8-2005, demanding the payment against the above cheque within 15 days from the date of receipt of the notice. 9. The complainant-company sent a legal notice to the accused persons through its Advocate on 23-8-2005, demanding the payment against the above cheque within 15 days from the date of receipt of the notice. 9. Accused persons failed to make the payment of abovesaid amount despite service of legal notice on them. In the complaint it is mentioned that the present applicant herein, was a Managing Director of accused No. 1 Company and accused No. 3 is authorised signatory of accused No. 1 company and accused No. 5 is Director of accused No. 4-Company and they are liable to be prosecuted and punished in accordance with law as prescribed by section 141 of the N. I Act. Further the offence has been committed by accused No. 1 with the consent and connivance of accused Nos. 2 to 5. 10. As per averments made in the complaint, the cheque in question was signed by accused No. 5 on behalf of the company. It is submitted by learned senior counsel for the applicant that the involvement of the present applicant in commission of the offence was neither averred nor stated by the non-applicant. Even the complaint petition proceeded on the basis that the averments contained in the complaint petition were not sufficient to enable learned Magistrate to summon the accused and urged that in the year 1995 when accused No. 1 took a loan of Rs. 4,00,000/- from the complainant, the present applicant was not Director of the company and when post dated cheque dated 25-7-2005 was dishonoured, present applicant was not the Director of the company as he had resigned from the post of Director on 5-11-2002 and, therefore, the alleged offence has not been committed by him. 11. Section 138 of the Act reads as under : "138. Dishonour of cheque for insufficiency, etc. 11. Section 138 of the Act reads as under : "138. Dishonour of cheque for insufficiency, etc. of funds in the account, - Where any cheque drawn by a person on any account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque or with both." 12. For constituting an offence in terms of the said provision, the following ingredients are to be satisfied :- a) A cheque must be drawn : b) It must be presented and returned unpaid inter alia with the remarks "insufficient funds"; c) A notice for payment should be served on the accused; d) The accused has failed to make the payment of the said amount to the payee within 15 days from the date of receipt of notice." 13. Section 141 of the Act provides for a constructive liability. A legal fiction has been created thereby. The statute being a penal one, should receive strict construction. It requires strict compliance of the provision. Specific averments in the complaint petition so as to satisfy the requirements of section 141 of the Act are imperative. Mere fact that at one point of time some role has been played by the accused may not by itself be sufficient to attract the constructive liability under section 141 of the Act. (See. K. Srikanth Singh vs. M/s North East Securities Ltd. and another, JT 2007(9) SC 449). 14. The Apex Court in the case of N. K. Wahi vs. Shekhar Singh and others, (2007) 9 SCC 481 has observed :- "8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. 14. The Apex Court in the case of N. K. Wahi vs. Shekhar Singh and others, (2007) 9 SCC 481 has observed :- "8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the Court can always come to a conclusion in facts of each case. But still, in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable." 15. The cheque in question was admittedly a post dated one. It was signed on 23-7-2005. It was presented for encashment on 25-7-2005 itself and the same was returned vide memo dated 3-8-2005. The applicant had resigned from the post of Director of the company in the year 2002. Despite that the applicant was implicated as one of the accused in the complaint as a Managing Director of accused No. 1 company which he was not. The authorised signatory of the cheque dated 25-7-2005 is accused No. 5-Dr. Shivendra Shrivastava who is Director of accused No. 4-Company. A person who had resigned in the company in the year 2002 could not be a person-in-charge of the company in the year 2005 when the cheque was dishonoured. 16. In this case, indisputably, the Company is the principal offender. A Director of the Company inter-alia can be proceeded against if he is found to be responsible therefor as envisaged under section 141 of the Act. The said provision reads thus : "141. Offences by companies. 16. In this case, indisputably, the Company is the principal offender. A Director of the Company inter-alia can be proceeded against if he is found to be responsible therefor as envisaged under section 141 of the Act. The said provision 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 deemed 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 corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this chapter. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed 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." (emphasis supplied) 17. If a person, thus, has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do. Legal fiction is raised both against the company as well as the person responsible for the acts of the company. If a person, thus, has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do. Legal fiction is raised both against the company as well as the person responsible for the acts of the company. Unlike other statute, this Act raises a presumption not only in terms of presumptions in given cases may have to be rebutted. The accused must be given an opportunity to rebut the said presumption. An accused is entitled to be represented in a case so as to enable it to establish that allegations made against it are not correct. 18. Section 141 of the Act raises a legal fiction. Such a legal fiction can be raised only when the conditions therefore, are fulfilled; one of it being that company is also prosecuted. 19. The section uses the term "as well as the company". The company which is, thus the principal offender must be included in the category of the accused. Here, I am not dealing with a case where an individual act of a person purporting to represent a company. In relation to business transactions, a company as a corporate entity may have created its own reputation. It must maintain it. If a complaint is filed, in a given case, only on the basis of the presumptions raised in the statute, it may be held to be guilty as a result whereof the reputation of the company shall suffer. It may, thus, suffer grave civil consequences. It is no longer res integra that a company can be proceeded against in a criminal proceeding, even where imposition of substantive sentence is provided for. 20. Interpretation of section 141 of the Act came up for consideration before a three-Judge-Bench of the Apex Court in S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla, (2007) 4 SCC 70 , wherein it was opined that criminal liability on account of dishonour of cheque primarily falls on the drawer company and is extended to the officers of the company. Analysing section 141 of the Act, the Apex Court observed as under : "4...Section 141 of the Act is an instance of specific provision which in case an offence under section 138 is committed by a company, extends criminal liability for dishonour of a cheque to officers of the company. Analysing section 141 of the Act, the Apex Court observed as under : "4...Section 141 of the Act is an instance of specific provision which in case an offence under section 138 is committed by a company, extends criminal liability for dishonour of a cheque to officers of the company. Section 141 contains conditions which have to be satisfied before the liability can be extended to officers of a company. Since the provision creates criminal liability, the conditions have to be strictly complied with. The conditions are extended to ensure that a person who is sought to be made vicariously liable for an offence of which the principal accused is the company, had a role to play in relation to the attributed to him to make him liable. In other words, person who had nothing to do with the matter need not be roped in. A company being a juristic person, all its deeds and functions are the result of acts of others. Therefore, officers of a company who are responsible for acts done in the name of the company are sought to be made personally liable for acts which result in criminal action being taken against the company. It makes every person who, at the time of offence was committed, was in-charge of, and was responsible to the company for the conduct of business of the company, as well as the company, liable for the offence. The proviso to the sub-section contains an escape route for persons who are able to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence." 21. In Sabitha Ramamurthy vs. R.B.S. Channabasavaradhya, (2006) 10 SCC 581 , the Apex Court held that though a person was not personally liable for the offences committed by the company, however, he would only be liable vicariously for the acts of company in terms of section 141 of the Act only if the requisite averments, are made in the complaint petition. 22. In S.V. Muzumdar vs. Gujarat State Fertillizer Co. Ltd., (2005) 4 SCC 173 , the Apex Court explicitly laid down the following categories of persons who are covered under section 141 of the Act : "10. (1) The company which committed the offence. (2) Everyone who was in-charge of and was responsible for the business of the company. 22. In S.V. Muzumdar vs. Gujarat State Fertillizer Co. Ltd., (2005) 4 SCC 173 , the Apex Court explicitly laid down the following categories of persons who are covered under section 141 of the Act : "10. (1) The company which committed the offence. (2) Everyone who was in-charge of and was responsible for the business of the company. (3) Any other person who is a Director or a Manager or a secretary or officer of the company with whose connivance or due to whose neglect the company has committed the offence." 23. In Sarav Investment and Financial Consultants (P) Ltd. vs. Lloyds Register of Shipping Indian Office Staff Provident Fund, (2007) 14 SCC 753 , the Apex Court opined that the Director of the company is only vicariously liable for the acts of the company, and could be prosecuted only if the conditions precedent laid down in section 141 of the Act are satisfied. 24. In K.Sriknath Singh vs. North East Securities Ltd., (2007) 12 SCC 788 , a criminal complaint was filed for the dishonour of cheque. The appellant therein had been proceeded against for alleged commission of an offence under section 138 of the Negotiable Instruments Act by the trial Court. Before the High Court quashing of proceedings under section 482 of the Code of Criminal Procedure, 1973 was sought. 25. It was contended by the appellant in K. Srikanth Singh (supra) case that at the relevant point of time since he was not the director of the company, hence no cognizance could be taken as the same does not satisfy the requirements of section 141. The High Court dismissed the petition holding the same as fact in respect thereof was required to be established before the trial Court. 26. In MCD vs. Ram Kishan Rohtagi, (1983) 1 SCC 1 , respondent No. 1 was the Manager and respondents 2 to 5 were Directors of X Company. The respondents were charged for offences under sections 7 and 16 of the Prevention of Food Adulteration Act, 1954 and section 482 of the Criminal Procedure Code, 1973 as the toffees manufactured by X company were found to be not conforming to the standards prescribed for toffees. On appeal, the High Court quashed the proceedings against the respondents. It was held by the Apex Court that : "15. On appeal, the High Court quashed the proceedings against the respondents. It was held by the Apex Court that : "15. So far as the Manager is concerned, we are satisfied that from the very nature of his duties it can be safely inferred that he would undoubtedly be vicariously liable for the offence; vicarious liability being an incident of an offence under the Act. So far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable." However, as regards the Manager of the company, the Court held that since he could not fall in the same category as the Directors, and as he was directly in-charge of the affairs of the company, he should be held to be liable. 27. In S.M.S. Pharmaceuticals Ltd. (supra) it was held by the Apex Court that requisite averments must appear on the face of the complaint petition itself stating : "18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under section 141 of the Act is sought to be fastened vicariously on a person connected with the company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That the respondent falls within the parameters of section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within section 141, he would issue the process. We have seen that merely being described as a Director in a company is not sufficient to satisfy the requirement of section 141. Even a non-director can be liable under section 141 of the Act. If the Magistrate is satisfied that there are averments which bring the case within section 141, he would issue the process. We have seen that merely being described as a Director in a company is not sufficient to satisfy the requirement of section 141. Even a non-director can be liable under section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial." 28. It is well settled law that only drawer of the cheque can be prosecuted under section 138 of the Act on the cheque getting dishonoured. Since the applicant was neither the drawer of the cheque nor he was Director of the accused No.1 company when cheque got dishonoured or he was a person responsible for non-payment of cheque amount, no offence under section 138 of the Act can be made out against the applicant. The non-applicant/complainant has failed to establish any relationship/nexus between accused No. 4 and accused No.1. The loan was taken by accused No.4- company, but it is nowhere explained that why accused No. 1-company is liable to pay the loan obtained by accused No. 4-company. Complainant has not produced any deed/document/agreement that there was any privity of contract vis-à-vis the accused companies. Thus, no criminal liability could legally be fastened in absence of any agreement. The complainant failed to point out that the present applicant had played some important role at one point of time. A person who has resigned from the company in the year 2002 could not be a person in-charge of the said company in the year 2005 when the cheque was dishonoured. He could not ask to pay the amount of loan. The applicant was ex Director could not have been made responsible for dishonoured of cheque of the company otherwise. 29. For the above mentioned reason, from the face of the complaint and the documents annexed therein filed by the non-applicant, no case under section 138 of the Act is made out. The complaint being not maintainable against the applicant under the provisions of Negotiable Instruments Act and the same deserves to be quashed and is, accordingly, quashed against the present applicant-accused No. 4 only. 30. The complaint being not maintainable against the applicant under the provisions of Negotiable Instruments Act and the same deserves to be quashed and is, accordingly, quashed against the present applicant-accused No. 4 only. 30. In view of above, the petition under section 482, Criminal Procedure Code is allowed.