JUDGMENT Arup Kumar Goswami, J. 1. This is an application under section 482 of the Code of Criminal Procedure, 1973, for short, the Code, praying for quashing of order dated 19.06.2009 passed by the learned Sub Divisional Judicial Magistrate No. 2 in C.R. Case No. 2158c/2009 so far as it relates to taking cognizance against the petitioner and issuing process under section 138 of the Negotiable Instruments Act, 1881, for short, the Act and the order dated 25.03.2011 and other subsequent orders where under bailable warrant of arrest was issued against the petitioner. The case of the petitioner is that she is one of the Directors of M/s. Upasana Builders Pvt. Ltd., hereinafter referred to as Company, which is a private limited company, registered under the Companies Act, 1956, along with her husband, who is the Managing Director of the Company, who manages the affairs of the Company. 2. The respondent No. 2 filed a complaint case before the learned Chief Judicial Magistrate, Kamrup under sections 138/141 of the Act, wherein the present petitioner was impleaded as accused No. 3. It is stated that two post-dated cheques bearing No. 403411 dated 28.11.2008 for Rs.17,07,290/- and No. 403412 dated 27.02.2009 for Rs.19,51,040/-, totaling Rs.36,58,330/-, which were handed over to the complainant/respondent No. 2 towards discharge of outstanding debt/liability for a loan availed of by the company amounting to Rs.110 lakhs, when presented within the validity period of the cheques to the bank, were returned on 02.09.2009 for the reason "full cover not received" alongwith return memos. 3. The learned Magistrate, to whom the case was transferred for disposal, took cognizance of the offence against the company, the husband of the petitioner and the petitioner under section 138 of the Act and issued summons to all the accused persons by his order dated 19.06.2009. 4. Subsequently, by an order dated 25.03.2011, bailable warrant of arrest was issued against the accused persons. 5. I have heard Mr. T.H. Hazarika, learned counsel for the petitioner and Mr. A.C. Sarma, learned counsel for the respondent No. 2. There is no representation on behalf of the State of Assam, impleaded as respondent No. 1 in this petition. 6. Mr. Subsequently, by an order dated 25.03.2011, bailable warrant of arrest was issued against the accused persons. 5. I have heard Mr. T.H. Hazarika, learned counsel for the petitioner and Mr. A.C. Sarma, learned counsel for the respondent No. 2. There is no representation on behalf of the State of Assam, impleaded as respondent No. 1 in this petition. 6. Mr. Hazarika has submitted that the petitioner is only a Director and she is not looking after the affairs of the company and there being no statement in the complaint petition as to how and in what manner the petitioner is responsible for the conduct of the company, no offence under section 138or section 141 of the Act is made out against the petitioner. It is further submitted that in the complaint petition it is specifically mentioned that the day to day affairs of the company is run by the Managing Director. The learned counsel submits that on the basis of the statements made in the complaint,, the petitioner cannot be made vicariously liable solely because of her position as a Director in the Company. In support of his submissions, the learned counsel relies on the following judgments: (1) S.M.S. Pharmaceuticals Ltd, v. Neeta Bhalla, reported in (2005) 8 SCC 89 . (2) Everest Advertising (P) Ltd. v. State (Govt. of NCT of Delhi), reported in (2007) 5 SCC 54 . (3) National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, reported in (2010)3 SCC 330 . 7. Mr. A.C. Sarma, learned counsel for the respondent No. 2/complainant, relying upon the case of N. Rangachari v. Bharat Sanchar Nigam Limited, reported in (2007) 5 SCC 108 , submits that on the basis of the statements made in the complaint, the learned Magistrate rightly took cognizance against the petitioner under section 138 of the Act and therefore, no interference is called for in this revision application with the order taking cognizance against the petitioner and other subsequent orders which are under challenge. 8. 8. From the complaint petition, it appears that the accused persons had applied to the complainant, Housing and Urban Development Corporation Ltd., for short, HUDCO, for finance of Rs.200 Lakhs for construction of an apartment building and the application was approved and sanctioned for the project in question and the letter of offer issued by the complainant was accepted by the accused No. 2 on his behalf and on behalf of the company and by the accused No. 3 by putting their signatures and seal thereon. Subsequently, loan agreement was executed wherein loan amount was reduced from earlier Rs.200 Lakhs to Rs.110 Lakhs and this revised loan was also accepted. Following the terms and conditions and stipulations for financing the amount of Rs.110 Lakhs, post-dated cheques in favour of HUDCO covering the principal amount and interest thereon for full repayment period, signed by the accused No. 2 as Managing Director of the Company, was handed over. 9. Sections 138 and 141, which are relevant, read as follows: 138. Following the terms and conditions and stipulations for financing the amount of Rs.110 Lakhs, post-dated cheques in favour of HUDCO covering the principal amount and interest thereon for full repayment period, signed by the accused No. 2 as Managing Director of the Company, was handed over. 9. Sections 138 and 141, which are relevant, read as follows: 138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an 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 provision of this Act, be punished with imprisonment for a term which may extend to two year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless - (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. 141. 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 subsection 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 purpose 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. 10. Section 138 is charging section creating criminal liability in case of dishonour of a cheque. Main ingredients of section 138 are: (i) issuance of a cheque, (ii) presentation of the cheque, (iii) dishonour of the cheque, (iv) service of statutory notice on the person sought to be made liable, and (v) non-compliance or non-payment in pursuance of the notice within 15 days of the receipt of the notice. 11. Main ingredients of section 138 are: (i) issuance of a cheque, (ii) presentation of the cheque, (iii) dishonour of the cheque, (iv) service of statutory notice on the person sought to be made liable, and (v) non-compliance or non-payment in pursuance of the notice within 15 days of the receipt of the notice. 11. Section 138 casts a criminal liability punishable with imprisonment or fine or with both on a person who issues a cheque towards discharge of a debt or liability as a whole or in part and the cheque is dishonoured by the bank on presentation subject to fulfillment of the conditions set out in the proviso to Section 138. Section 141 lays down a special provision in respect of issuance of cheques by companies and commission of offences by companies under Section 138 of the Act. Section 141 extends criminal liability in case of the company to every person who, at the time of the offence, was in charge of, and was responsible for the conduct of the business of the company. By a deeming provision contained in Section 141 of the Act, such a person is vicariously liable to be held guilty for the offence under Section 138 and punished accordingly. The key words in Section 141 are "every person" and the section requires that persons who are sought to be made criminally liable under Section 141 should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fell within the ambit of the provision. It is only those persons who were in charge of and responsible for the conduct of business of company at the time of commission of an offence, who will be liable for criminal action. If a Director of a company who was not in charge of or was not responsible for the conduct of the business of the company at the relevant time, he will not be liable under the provision. The liability arises from being in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Section 141 is a penal provision creating vicarious liability and therefore, must be strictly construed. The liability arises from being in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Section 141 is a penal provision creating vicarious liability and therefore, must be strictly construed. 12. In S.M.S. Pharmaceuticals Ltd. (supra), following 3 questions were referred for consideration of a larger Bench by a two -Judges Bench of the Apex Court: (a) Whether for purposes of Section 141 of the Negotiable Instruments Act, 1881, it is sufficient if the substance of the allegation read as a whole fulfill the requirements of the said section and it is not necessary to specifically state in the complaint that the person accused was in charge of, or responsible for, the conduct of the business of the company. (b) Whether a director of a company would be deemed to be in charge of, and responsible to the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary. (c) Even if it is held that specific averments are necessary, whether in the absence of such averments the signatory of the cheque and or the managing directors or joint managing director who admittedly would be in charge of the company and responsible to the company for conduct of its business could be proceeded against. 13. The Apex Court summed up the discussions as follows: 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 a 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. 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 of a company is not sufficient to satisfy the requirement of Section141. 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. 14. The Apex Court answered the questions posed in the reference as under: (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the 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 the question posed in sub-para (b) has to be in the 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 the 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 the 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 the conduct of its business. (c) The answer to Question (c) has to be in the 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 the 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 the signatory of a cheque which is dishnoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141. 15. In Everest Advertising (P) Ltd. (supra), the Apex Court had observed that a Chairman of a large company may or may not be aware of the actual transaction if in a given situation, cheques are issued in ordinary course of business, but the Managing Director or a Deputy Managing Director would be deemed to be aware thereof in view of S.M.S. Pharmaceuticals Ltd. (supra). Having regard to the averments made in the complaint in that particular case, the Apex Court held that the ingredients of provision of section 141 of the Act stood satisfied in case of the Chairman and the Vice-Chairman. 16. In N. Rangachari (supra), on which strong reliance was placed by Mr. Sarma, the Apex Court has Observed that a company, though legal entity, cannot act by itself but can only act through its Directors and 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. It was noted that an allegation in the complaint that the named accused are Directors of the company itself would usher in the element of their acting for and on behalf of the company and of their being in charge of the company. On the basis thereof, Mr. Sarma submitted that as the petitioner was described as Director, which position is not disputed, such statement satisfies the ingredients of section 141 of the Act. 17. On the basis thereof, Mr. Sarma submitted that as the petitioner was described as Director, which position is not disputed, such statement satisfies the ingredients of section 141 of the Act. 17. In para 20 of N. Rangachari (Supra), the Apex Court itself had taken note of the binding precedent of S.M.S. Pharmaceuticals Ltd. (supra), which had postulated that a Director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business in the context of section 141 of the Act. 18. N. Rangachari (supra) was also considered by the Apex Court in the case of National Small Industries Corporation Limited (Supra) and it was noted that N. Rangachari, decided a two-Judges Bench does not and could not have overruled the decision in S.M.S. Pharmaceuticals Ltd. (supra), Ramraj Singh v. State of M.P., reported in (2009) 6 SCC 729 , which are three Judges Bench judgments, wherein it was clearly held that specific averments have to be made against the accused Director. 19. From the above discussion, it is clear that in a complaint under section 141 of the Act, a statement to the effect that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company has to be made. Merely because one is a Director of the company is not sufficient to make such Director liable under Section 141 of the Act as there is no deemed liability of a Director in as much as a Director cannot be deemed to be in charge of and responsible to the company for the conduct of its business. However, position with regard to the Managing Director or Joint Managing Director would be different and by virtue of the office that they hold, they are in charge of and responsible for the conduct of business of the company. 20. Bearing in mind the principles that have emerged in the context of section 141 of the Act, it is time to have a close look at the averments made in the complaint to determine whether the petitioner is liable to be proceeded with under section 138 of the Act because of her position as a Director in the Company. 21. Bearing in mind the principles that have emerged in the context of section 141 of the Act, it is time to have a close look at the averments made in the complaint to determine whether the petitioner is liable to be proceeded with under section 138 of the Act because of her position as a Director in the Company. 21. In paragraph 2 of the complaint, it is stated as follows: That the accused No. 1 is a Private Limited Company and the accused No. 2 is the Managing Director of the said accused No. 1 company. The accused No. 2 is responsible to the accused No. 1 company for the conduct of the business of the company and the accused No. 3 is a Director of the said accused No. 1 company. 22. The petitioner, as is noted earlier, is the accused No. 3. The only other role attributed to the petitioner is at the time of acceptance of the letter of offer made by the complainant for grant of loan of Rs.200 Lakhs. When the loan amount was reduced to Rs.110 Lakhs, it is averred in the complaint that accused Nos. 1 and 2 accepted the amendment by signing the same on 07.11.2007 and HUDCO released and disbursed a total amount of Rs.110 Lakhs to the accused Nos. 1 and 2 as loan. 23. There is no averment that the petitioner was in charge of and responsible for the conduct of business of the company and on the contrary, a specific averment in the complaint is made to the effect that the accused No. 2 is responsible to the accused No. 1 company for the conduct of the business of the company. 24. In view of the above, in absence of the essential averment in the complaint that the petitioner was in charge of and responsible for the conduct of business of the company, vicarious liability under section 141 of the Act cannot be fastened on the petitioner and therefore, the learned Magistrate committed manifest illegality in taking cognizance of the offence under section 138 of the Act against the petitioner and as such, the order dated 19.06.2009, so far it relates to taking cognizance against the petitioner, is quashed. Consequently, orders issuing warrant of arrest against the petitioner also stand quashed. In the result, the petition is allowed. No costs.