TMI Blog2010 (12) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner is concerned. Otherwise, the continuance of which will be an abuse of process of court even if it is for one more day. Appeal allowed. - CRL. O.P. NOS. 24482, 24483 & 24484 OF 2010 - - - Dated:- 23-12-2010 - G.M. AKBAR ALI, J. Rajnish Pathiyil for the Petitioner. A. Ramesh and M. Ajmal Azzath for the Respondent. JUDGMENT The petitions are filed seeking a direction to call for the records in C.C. Nos. 2356, 2357 and 2358 of 2010 on the file of the learned XIII Metropolitan Magistrate, Egmore, Chennai. 2. The common point that arises in all the above criminal original petitions is whether the petitioner, who has been arrayed as A3 in a private complaint given under section 138 read with section 141 of the Negotiable Instruments Act, 1881, was in charge of and was responsible for the conduct of the business of the company. 3. The brief facts of the case are as follows : The respondent was dealing with manufacturing and selling of medicines. The petitioner is a director of a company named M/s. Guru Chem Laboratories P. Ltd., one Vikram Ahluvalia was a chairman and director. The petitioner, who is the mother of the above said person, is also one of the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n essential requirement of section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of section 141 cannot be said to be satisfied. (b). . . Merely being a director of a company is not sufficient to make the person liable under section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases." 9. On the contrary, Mr. A. Ramesh, learned senior counsel for Mr. M. Ajmal Azzath appearing for the respondent submitted that the petitioner has not approached the court with clean hands. Learned counsel pointed out that the entire transaction took place in the year 2004 and the statutory notice was given in the year 2005. Learned counsel further pointed out that on June 9, 2005, the complaint was presented and the same was taken on file in the year 2006 and twice non bailable warrant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly." 12. Therefore, every person who at the time the offence was committed was in charge 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. The above provision makes it clear that the persons who are sought to be made vicariously liable for criminal offence should be at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company. 13. In DCM Financial Services Ltd. v. J.N. Sareen [2008] 144 Comp. Cas. 55, it was held as follows (page 63) : "While analysing section 141 of the Act, it will be seen that it operates in cases wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to do with the transaction complained of. A person who is in charge of and responsible for conduct of business of a company would naturally know why the cheque in question was issued and why it got dishonoured." 17. And further held (page 577 of 127 Comp Cas) : "To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a persons can be subjected to criminal process. A liability under section 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That respondent falls within parameters of section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within section 141 he would issue the process. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It is also pertinent to note that PW1 has not spoken anything about the petitioner in his chief examination. 22. It is submitted by the respondent that the witnesses were also examined and the questioning under section 313 of the Code of Criminal Procedure, 1973, was also completed and this court should allow the proceedings to go on and come to their logical conclusion. When there is no liability against the petitioner as a director of a company, no purpose would be served to allow the proceedings to continue even at the stage of arguments. The petitioner is an aged lady, who resides at New Delhi. The records would show that non-bailable warrant was issued for her non-appearance. Therefore, I am satisfied that the continuance of the proceedings is only harassment to the petitioner who cannot be fastened with liability under section 141 of the Act. It is also pertinent to note that the respondent-complainant can proceed against the company and the director who was actually in charge of and responsible for the conduct of the business of the company. 23. Therefore, no prejudice or loss would be caused to the complainant if the proceedings are quashed as far as the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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