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2017 (1) TMI 1790 - TELANGANA HIGH COURTDishonor of Cheque - vicarious liability of a Director - whether basic averments that, at the time the offence was committed, director was incharge of and was responsible for the conduct of the business of the company are suffice or specific averments showing as to how and in what manner the Director was responsible for the conduct of the business of the company, must also be made in the complaint? - HELD THAT:- The position under Section 141 of the Act can be summarized thus: (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix 'Managing' to the word 'Director' makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company. (ii) In the case of a Director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141. (iii) In the case of a Director, Secretary or Manager (as defined in Section 2(24) of the Companies Act) or a person referred to in clauses (e) and (f) of Section 5 of Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under Section 141(1). No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under Section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that sub-section. (iv) Other officers of a company cannot be made liable under sub-section (1) of Section 141. Other officers of a company can be made liable only under sub-section (2) of Section 141, be averring in the complaint their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence." Thus, it can be concluded that the nature and sufficiency of complaint allegations in respect of an offence under Section 141 of N.I. Act depend on the category of persons alleged i.e. 141(1) or 141(2). If it is held, basic averments are sufficient, whether the complainants and their sworn affidavits did contain such basic averments and whether the petitioner/A3 could by unimpeachable material demonstrate that the basic averments pleaded were false to the core to deserve quashing of the proceedings? - HELD THAT:- Since basic averments are made under Section 141(1) in terms of KK. AHUJA VERSUS VK. VORA [2009 (7) TMI 758 - SUPREME COURT], the Magistrate has rightly taken cognizance against the accused including petitioner-A3. It is argued by the petitioner that she was only a non-executive Director between 7.12.2007 and 23.11.2012 and she was not in-charge of and responsible for the day-to-day business activities of A1-company and she did not know about the issuance and dishonour of cheque. The petitioner sought to produce a copy of Form-32 wherein she was allegedly shown as non-executive Director. Refuting the same, the respondent too sought to produce copy of Form-32 which according to him, would show the petitioner was a Director. He also sought to produce some letters allegedly written by the petitioner to some trading parties in the capacity of Chairman to show that she was actively engaged in the day-to-day business operations. It must be mentioned that neither party could produce unimpeachable and uncontrovertible evidence beyond doubt and this Court in a petition under Section 482 Cr.P.C. cannot make in depth enquiry on a question of fact which can be determined only after full-fledged trial. The parties are at liberty to establish their individual stand during trial and the trial Courts shall decide the cases on merits. The criminal petitions are dismissed.
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