TMI Blog2017 (3) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... een furnished by Form 32 to the Registrar of Companies on 24-03-2006 in conformity with the rules. Thereafter, the appellant had played no role in the activities of the default Company. This fact remains substantiated with the Statement filed by the default Company on 20-02-2006 with the Registrar of Companies that in an advertisement of the Company seeking deposits (Annexure P3), only the names of three Directors of the Company were shown as involved in the working of the Company and the name of appellant was not therein. Indisputably, therefore, the cheques bounced on 24-08-2006 due to insufficient funds were neither issued by the appellant nor the appellant was involved in the day to day affairs of the Company. Before summoning an acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable Instruments Act, 1881 (for short the Act ) read with Section 420 of the Indian Penal Code. 3. The brief history of the case as per the complaint is that the accused/appellant issued nine cheques on 6-7-2006 in favour of the complainant Company for ₹ 8,00,000/- each, and one other cheque for ₹ 9,40,780.05 in discharge of legal liability of M/S Coventry Spring and Engineering Company Ltd. (for short the defaulter Company ) of which the appellant was a Director. When the cheques were presented for clearance, they were dishonoured by the bank with remarks insufficient funds on 24-08-2006. The complainant- respondent thereafter, served legal notice dated 6-9-2006 demanding payment but the appellant-accused did not make p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en filed. Learned counsel further argued that since the bounced cheques were not actually issued by the appellant, nor he was holding the post of Director at that point of time and he has nothing to do with that transaction therefore he is not liable. Simply for the reason that at one point of time, the appellant had played some role in the activities of the defaulter Company as a Director would not bind him to the constructive liability under Section 141 of the Act. In support of his argument, learned counsel relied on a decision of this Court in DCM Financial Services Ltd. Vs. J.N. Sareen Anr. (2008) 8 SCC 1. 5. Learned counsel for the respondent, on the other hand, supported the impugned judgment and submitted that as a matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook into the principles of law settled by this Court on the subject. 8. In Girdhari Lal Gupta Vs. D.H. Mehta Anr. (1971) 3 SCC 189, this Court observed that a person in charge of a business means that the person should be in overall control of the day to day business of the Company. 9. Interpreting the provisions of Section 141 this Court in National Small Industries Corporation Vs. Harmeet Singh Paintal Anr. (2010) 3 SCC 330 observed that Section 141 is a penal provision creating vicarious liability, and which, as per settled law, must be strictly construed. It is therefore, not sufficient to make a bald cursory statement in a complaint that the Director (arrayed as an accused) is in charge of and responsible to the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re issued while the appellant was Director of the Company with validity for a period of six months but during that period they were not presented for realization at the bank. The appellant has resigned as Director w.e.f. 2-1-2006 and the fact of his resignation has been furnished by Form 32 to the Registrar of Companies on 24-03-2006 in conformity with the rules. Thereafter, the appellant had played no role in the activities of the default Company. This fact remains substantiated with the Statement filed by the default Company on 20-02-2006 with the Registrar of Companies that in an advertisement of the Company seeking deposits (Annexure P3), only the names of three Directors of the Company were shown as involved in the working of the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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