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2022 (1) TMI 102 - HC - Indian LawsDishonor of Cheque - petitioners are the Directors of the first accused company - vicarious liability of Directors in the company - Section 141 of the Negotiable Instruments Act - HELD THAT:- It is settled law that there is no vicarious liability in criminal jurisprudence, unless the Statue makes them vicariously liable for the offence committed by the company. When the offence is committed by the company, merely because some persons are directors of the company, they cannot be roped into and make them liable for the offence committed by the company - Section 141 of the Negotiable Instruments Act, provides that when the company committed any offence, every person who, at the time the offence was committed, was incharge 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. By virtue of the legal fiction created under Section 141 of the Act, every person who are all in charge of and responsible for the day to day affairs of the company are deemed to have committed the offence - a basic averment has to be made in the complaint, which is an essential requirement under Section 141 of the Negotiable Instruments Act. In the absence of any such specific averment in the complaint merely because the petitioners are being the directors of the company, they cannot be made liable for offence under Section 141 of the Negotiable Instruments Act. There is no specific averment in the complaint to the effect that the petitioners who are all the directors of the company are in charge of and responsible for the conduct of the business of the company. Merely saying that they are directly involved in the affairs of the company is not sufficient. Being a director of the company, he may be involved in the affairs of the company as attending the meeting of the Board of Directors, guiding the company in administrative and policy matters. But, that itself is not sufficient to hold that they are in charge of and responsible to the day to day affairs and the conduct of the business of the company - the Judicial Magistrate is expected to consider all the materials available before him and on due application of mind form an opinion that a prima facie case is made out in respect of an offence, then only the learned Judicial Magistrate can proceed further and issue process against the accused. The averment made in the complaint is not sufficient to fix criminal liability against the petitioners and the learned Magistrate without considering the same has taken cognizance of the offence against the petitioners and has issued summons to them - petition allowed.
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