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2021 (3) TMI 851 - HC - Indian LawsDishonor of Cheque - vicarious liability of the Directors for having committed the offence under Section 138 of the N.I.Act - HELD THAT:- Perusal of the papers produced along with the petition shows that the cheque in question bearing No.000093 dated 28/7/2015 drawn on an account maintained in Bank by accused No.1 is at page 18 of the petition papers. It is signed only by accused No.2. The signatures of the present petitioners does not appear on the same. There is no allegation in the entire complaint that the present petitioners were either incharge of the Administration/Business of the company or that they are signatories to the cheque in question. Reliance placed in the case of SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [2005 (9) TMI 304 - SUPREME COURT] where it was held that The question ‘notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of section 141. The proceedings on the file of learned I Additional JMFC, Bagalkot, for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 is quashed - petition allowed.
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