2007 (2) TMI 311 - SC - Corporate Laws

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 fulfil the requirement of the said section and it is not necessary to specifically state in the complaint that the person accused was incharge of, or responsible for, the conduct of the business of the company?

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?

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 incharge of the company and responsible to the company for conduct of its business could be proceeded against?

Held that:- Appeal dismissed. The High Court has gone into the matter at some length. The High Court found that the resolution by itself did not constitute an offence even assuming that the same bore the signature of Respondent No. 1 (although the genuineness thereof was disputed).

Thus on a plain reading of the averments made in the complaint petition, we are satisfied that the statutory requirements as contemplated under section 141 of the Act were not satisfied.