TMI Blog2019 (1) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... ffairs or conduct of its business. The complaints are conspicuously silent on this score. Rather the complaints would not even acknowledge receipt of the said replies. Same is the position with the affidavits which were filed during the pre-summoning inquiry. The complaints, insofar as they are directed against the petitioners, would, thus, fail even on the averment test - the petitioners concededly being non-executive directors, in absence of any further averments as to their role in the company at the time of commission of the offences, the presumption under Section 141 NI Act cannot be raised against them. Petition allowed. - CRL.M.C. 3729/2017 & Crl.M.A. 15136/2017, CRL.M.C. 3730/2017 & Crl.M.A.15138/2017, CRL.M.C. 3731/2017 & C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (the company accused) at all relevant points of time, though their additional submission also is that they had already resigned from even such position prior to the presentation of the cheques for encashment. 3. The submission of the petitioners that on account of being nonexecutive directors nominees of the investor company, they were not responsible for the day-to-day affairs or conduct of the business of the company accused, is founded primarily on copies of Form 32 submitted pursuant to sections 303 (2), 264(2) or 266 (1) (a) and 266 (1)(b) (iii) of the Companies Act, 1956, the said document indicating their appointment as non-executive directors in the company accused on 07.08.2012. It has been submitted that this fact was with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability arising out of the dishonored cheques cannot escape the presumption being raised in terms of Section 141 NI Act, it being a matter of their burden of proof to show facts to the contrary. 5. During the course of hearing, reference was made primarily to three decisions of the Supreme Court reported as SMS Pharmaceuticals Pvt. Ltd. vs. Neeta Bhalla (2005) 8 SCC 89; Gunmala Sales (P) Ltd. vs. Anu Mehta (2015) 1 SCC 103 and Standard Chartered Bank vs. State of Maharashtra (2016) 6 SCC 62. Similar issues had come before this Court in a batch of matters led by Jwala Devi Enterprises P. Ltd. vs. Fadi EL Jaouni 2018 SCC Online Del 10030. This Court taking note of the penal clause under Section 138 held thus:- 6. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Negotiable Instruments Act, 1881 is a company, the person who was signatory to the cheque which is dishonoured is clearly responsible for the incriminating act and would be liable to be proceeded against under Section 141 (2); (iii). By virtue of the office they hold, the persons working in the capacity of the Managing Director or Joint Managing Director are deemed to be in charge of, and responsible for the conduct of the business of, the company and, therefore, can be proceeded against in terms of Section 141; (iv). Merely because a person is a director of the company is not sufficient to make him liable under Section 141, there being no deeming that by holding such position he is in charge of, or responsible for the conduct of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e offence was committed and thereby showing a case that making him stand the trial would be an abuse of the process of court, but not otherwise . 7. It may be that under the articles of association of the company accused, the petitioners being the non-executive directors nominated by the investor company have some role to play on the board of directors. It may also be that no meeting of board of directors could be convened without at least one of them being present. But then, there is some distinction between being privy to what were the affairs of the company and being responsible for its day-to-day affairs or conduct of its business. 8. Dealing with the issue relating to the status of non-executive directors , the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, 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 company for the conduct of the business of the company without anything more as to the role of the Director. But the complaint should spell out as to how and in what manner Respondent 1 was in charge of or was responsible to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. 14. A company may have a number of Directors and to make any or all the Directors as accused in a complaint merely ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
