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2022 (3) TMI 583 - HC - Indian LawsDishonor of Cheque - liability of a Director of a company - vicarious liability - contentions of the applicant are that the impugned order of summoning is a non speaking order - principles of natural justice - HELD THAT:- In case of K. SRIKANTH SINGH VERSUS NORTH EAST SECURITIES LTD. [2007 (7) TMI 405 - SUPREME COURT] the Hon’ble Apex Court has held that for vicarious liability of Director of a company it must be pleaded and shown that the Director was responsible for the conduct of the business of the company at the time of commission of offence. Only being a Director is not enough to cast a criminal liability. Vicarious liability must be pleaded and proved and can not be merely inferred. It is clear from the perusal of the complaint that there is no specific averment that applicant is involved in day-to-day affairs of the company. There is only general allegation that applicant is a Director of the company. The documents filed by the applicant establishes that the applicant was a nominee Director and who has now resigned - thus, it is clear that in absence of specific allegations about the applicant he can not be prosecuted for any offence under section 138 N.I. Act. The learned Magistrate has failed to consider the matter properly. The order of summoning regarding applicant is unjust and illegal and can not be sustained. Application allowed.
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