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2022 (8) TMI 466 - HC - Indian LawsDishonor of Cheque - vicarious liability of Director - Managing Director or Joint Managing Director in charge of the business or not - liability of signatory of cheque - Section 141 of the N.I. Act - HELD THAT:- While it is correct that there can be no deemed liability of Directors, there is a simultaneous requirement that when the petitioner seeks the quashing of a complaint, there is an onus on the petitioner to furnish some kind of sterling and incontrovertible material or other reasonable circumstances to substantiate his contention that he was not in-charge of and responsible for the conduct of the business of the accused company. A complaint cannot be quashed merely on the ground that no particulars are given in the complaint about his role if the basic averment was sufficient to make out a case in the complaint. There are averments that both the Directors had acted on behalf of the accused No.1 for the manufacture and supply by the complainant/respondent of 12,000 STBs Units at a particular price. The complainant has averred that it had entered into an MoU on 14th June, 2018 and had executed to Tripartite Agreement dated 18th September, 2018 and 2nd December, 2018 with the accused No.1 in this regard, whereafter the post dated cheques drawn in favour of the complainant were issued. The complaint further sets out how when the accused No.1 company failed to make timely payments, a demand notice was specifically issued for the payment of outstanding dues to the tune of Rs.27,13,10,296/-. The 15 cheques were presented which were then dishonored leading to the filing of the complaints - the document relied upon by the respondents does not reflect the fact that the petitioner while being a Director of the accused company was participating in the conduct of the business by entering into trade agreements on behalf of the company. The averments do not find support from the very documents relied upon by the complainant/respondent. The petitioner is not responsible for and in-charge of the business of the accused company. It is not pleaded in the complaints that the dishonoured cheques had been signed by the petitioner. Nor has it been so urged before this Court. Thus, the averments made in the complaints even if be fully accepted, the documents annexed thereto ex facie show that the petitioner though a Director of the accused company was not in-charge of or responsible for the conduct of its business. Thus, an essential ingredient of Section 141 N.I. Act based on which vicarious liability could be attached to the petitioner is missing. The position of law being what it, is no two views can be taken in the present matters - Petition allowed.
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