TMI Blog1998 (7) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- drawn on Prudential Cooperative Urban Bank Limited, 2. Cheque dated 5-2-1996 for a sum of ₹ 1,80,095-10 Ps. drawn on S.B.H. Gunfoundry Branch. 3. Cheque dated 5-3-1996 for a sum of ₹ 1,80,095-40 Ps. drawn on S.B.H. Gunfoundry Branch, Hyderabad. The complainant presented the chequed for encashment and all the three cheques were returned dishonoured on 3-5-1996 with an endorsement insufficient funds . The complainant thereafter got issued notice dated 4-5-1996 to the accused and the said notices were received by all the Directors. The accused failed to pay the Cheque amount within fifteen days from the date of receipt of notices. It is under those circumstances, the complaint was filed. The complainant was examined and the learned Magistrate had taken cognizance of the case under Section 138 read with 142 of the Act and accordingly directed to issue summons. 4. It is an admitted fact that the first petitioner is a company registered under the Companies Act represented by its Managing Directors the second petitioner and petitioners 3 to 7 are other Directors of the first petitioner company. In this application to quash the proceedings, the petitioners he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e if any, committed by the first petitioner company, It is only the said question that arise for consideration in this petition. 7. A bare reading of the complaint would disclose nothing against the petitioners 3 to 7. No allegations are levelled against them. The complaint is drafted in vague and indefinite terms. It reads as though all the petitioners herein have signed the cheques which remain dishonoured. It is alleged that the complainant issued notice dated 4-5-1996 to the accused and it is further alleged that notices were received by all the Directors. There is no specific allegation against petitioners 3 to 7 that at the relevant time, they were incharge of and were responsible to the company for the conduct ofthe business of the company. There is not even a whisper. At this stage, it would be appropriate to notice Section 141. of the Act. 141. Offences by companies :--(1) If the person committing an offence under Section 138 is a company, 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 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mad.) observed that: When art offence is committed by a company, every person who at the time the offence was committed was incharge and was responsible to the company for the conduct of the business, shall be liable to be proceeded against and punished along with the company. The basic requirement would be that there must be * some little material to indicate that the petitioners were incharge and were responsible for the conduct of the business of the company. Such averment being absent in the complaint, sworn statement and the document accompanying the complaint, the contention of the petitioner's Counsel will have to be necessarily upheld. A civil liability as partner will not suffice to prosecute them. This Court in Criminal Petition Nos.3584 and 3585 of 1997 dated 22-12-1997 held that: It has been consistently held by this Court that unless there are allegations in the complaint filed for the offence punishable under Section 138 of the Act that the Directors or partners of a Company or Firm are also incharge and responsible for the management of the business of the company or firm, they are not liable to be prosecuted, vide 1997 Crl. LJ, 3616 and 1985(2)A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company need not necessarily be a Director. Therefore, what is required for holding 'a person vicariously liable for the offence committed by a company, is the actual role played by such person in the management and conduct of the business of the company. All such persons who are responsible in the management of the business of the company and incharge of its business at the material time when the offence was committed by the company shall be deemed to be guilty of the offence. 9. The requirement in law is that there must be clear, unambiguous and specific allegations against the persons who are impleaded as accused that they were incharge of and responsible to the company in the conduct of its business at the material time when the offence was committed by the company. It cannot be left to the wild imagination of the complainant. There must be specific accusation against each of the persons impleaded that such person was incharge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed by the company. True, it is not necessary to disclose the evidence as to on what basis such an assertion is made by the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of mind by the Magistrate, in a given case itself would vitiate the proceedings and give rise to a cause for interference of this Court in exercise of its inherent jurisdiction under Section 482 of Cr.P.C. Taking cognizance of any case without adverting to the contents of the complaint and the sworn statement and the statement of witnesses, if any, or without recording that the allegations made in the complaint reveal the commission of the complained offence would be without jurisdiction. I may however hasten to add that it is not the requirement in law that a Magistrate while taking cognizance of the case need write any elaborate order. It would be sufficient, if the proceedings disclose the application of mind to the contents of complaint and material made available on record. 12. In this back-ground, let me examine the contents of the complaint on hand. Th!?re is no whisper in the complaint against respondents 3 to 7. It is not even averred that they are aware of the second accused issuing cheques in question to the complainant. It is not even alleged that they are involved in day-to-day management of the affairs of the ; company. Nothing is stated as to in what way they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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