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2021 (12) TMI 1004 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - vicarious liability of Managing Director - Sections 138, 141 and 142 of the NI Act read with Section 420 IPC - HELD THAT:- The complaint was filed under Sections 138, 141 and 142 of the NI Act read with Section 420 IPC against A1 to A5. A5 is the Company shown as represented by its Managing Director Gade Manikumar - A1. The description or status of A2 to A4 was not mentioned in the compliant. It was only mentioned that A1 in his reply letter admitted that he and the Executive Director, petitioner- A3, were working on raising funds and settling the issue. The learned counsel for the petitioner filed Form-32 wherein A1 was shown as the Managing Director of the company, one Srikanth Akkina S/o. Venkata Raju Akkina as Director and the name of A2 as one of the Director and A4 as Additional Director. The cheque filed by the petitioner would disclose that it was issued by A1 in the capacity of the Managing Director of A5 company. Thus, the complaint or the documents filed would not disclose that the petitioner was neither the Director of the company nor issued the cheque on behalf of A5 - The name of the petitioner was not found anywhere in the said bond. Nowhere in the complaint, it was mentioned that the petitioner was responsible for the affairs of the company or that he issued the cheque. The Hon'ble Apex Court in National Small Industries Corporation Limited case [2010 (2) TMI 590 - SUPREME COURT] held that not every person connected with the company, but only those in-charge of and responsible for conduct of business of the company at the time of commission of offence were vicariously liable. Considering the citation and as no specific averments were made by the 1st respondent as to how and in what manner the petitioner was responsible for the affairs of the company and the role played by him in cheating the complainant, and as there are no specific averments that the petitioner had induced or made the 1st respondent to part with the said money with an intention to cheat him from the inception, it is considered fit to quash the proceedings against the petitioner - A3. Petition allowed - decided in favor of petitioner.
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