Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2023 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 1083 - HC - Indian LawsDishonour of Cheque - issuance of summons - vicarious liability of director of company - petitioner was a director or was handling the day to day affairs of the accused company at the relevant time when the cheques were issued? - HELD THAT:- Merely mentioning the designation of the accused person in the company or reproducing the phraseology of the section 141 NIA is not sufficient to attract the guilt under section 141 NIA. The law is no longer res integra that specific allegations/averments have to be made as to how and in what manner the accused alleged to have committed an offence under section 138 NIA, was responsible for, or had a role in the conduct of the business of the company, at the relevant time, when the offence is said to have been committed. Simply because the accused person was a Director or was holding some other office in the company, the vicarious liability cannot be extend to such persons. In SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [2005 (9) TMI 304 - SUPREME COURT], a Three Judge Bench of the Hon’ble Apex Court held that to attract vicarious liability under section 141 NIA it is sine qua non that the person accused was in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed. In SUNITA PALITA & OTHERS VERSUS M/S PANCHAMI STONE QUARRY [2022 (8) TMI 55 - SUPREME COURT], wherein the Hon’ble Apex Court set aside the order of the High Court rejecting the quashing petition and allowed the said appeal on the ground that the appellants therein were not the Managing Director or Joint managing Director of the accused company and nor were they signatories to the cheques in question. The Court held that the accused persons were merely independent, non-executive directors who had no role to play in the day to day affairs of the accused company. In the present case, the Ld.MM committed an error by summoning the petitioner, who was not even an Additional Director-Non Executive in the accused company at the time when the cheques were issued and thus was not handling the affairs or the conduct of business of the accused company at the relevant time. These facts were also mentioned in the reply on behalf of the petitioner to the legal notices of the complainants. However, Ld. MM ignoring such vital aspects, mechanically proceeded to issue summons to the present petitioner. The summoning orders qua petitioner are hereby set aside. The petitioner is acquitted for the offences alleged under section 138 NIA - Petition allowed.
|