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2021 (12) TMI 1008 - HC - Indian LawsDishonor of Cheque - execution of guarantee deeds by the petitioner prior to issuance of cheques in question - vicariously liability of Director for the offence under Section 138 read with Section 141 NI Act - resignation tendered to the accused company prior to issuance thereof - HELD THAT:- It is no longer res integra that to attract vicarious liability under Section 141 NI Act against any person, the accused person should have been in-charge and responsible for the conduct of the business of the accused company at the time of commission of offence. A person who was not a Director, and/or not in-charge of the affairs of the accused company or for the conduct of the business thereof, at the time when the offence was committed, cannot be held vicariously liable - To make a Director of a company vicariously liable under Section 141 NI Act, specific allegations have to be made out against him in the complaint. Considering that Section 141 NI Act is a deeming provision, whereby liability is attributed to Directors who were in-charge and responsible for the affairs of the accused company “at the time when the offence was committed”, it is discernible that regardless of a guarantee deed being executed as part of the impugned transaction, no criminal liability would be attributable to a Director of the accused company who executed such deed if he resigned therefrom prior to the issuance of the cheques in question. The petitioner had executed personal guarantee deeds dated 17.05.2011 and 18.06.2013. As the aforementioned relied-upon documents indicate, he ceased to be associated with the accused company as a Director with effect from 28.02.2014, whereas the cheques in question were issued only thereafter, i.e., from 30.03.2014 to 31.01.2016. Admittedly, the cheques were signed by respondent No. 3, who, as per the averment made in the complaints, alone undertook that the same would be duly honoured upon presentation. Such an undertaking/assurance was not attributed to the present petitioner. In this backdrop, the execution of guarantee deeds by the petitioner at an earlier point in time would not attract vicarious liability under Sections 138/141 NI Act. Besides, there is nothing on record to indicate that the petitioner was in-charge of and responsible for the conduct of the affairs of the accused company at the time of the commission of the offence under Sections 138/141 NI Act. This Court is of the opinion that the summoning orders against the petitioner are liable to be set aside - Petition allowed - decided in favor of petitioner.
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