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TMI Blog2020 (3) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner against the order dated 31.01.2017 was dismissed. [2]. Brief facts of the case are that the respondent filed a criminal complaint under Section 138 of the Negotiable Instruments Act against M/s D.S.G. Papers Pvt. Ltd. through its Director and authorized signatory Manoj Kumar, Manoj Kumar son of Suraj Bhan Gupta, Director M/s DSG Papers Pvt. Ltd and Neeru Gupta (petitioner). Complainant/respondent has pleaded that presently, he is living in U.S.A. Complaint has been filed through his brother Sanjay Dhawan as Special Power of Attorney. Complainant has pleaded that accused No.2 i.e. Manoj Kumar was having family relations with the family of the complainant. The accused were running the firm in the name and style of D.S.G. Papers Pvt. Limited and the accused allured the complainant and his family members to invest money in the business of the aforesaid firm and they assured 20% shares to the complainant and his family members. The complainant believed the accused and invested an amount of Rs. 33,70,000/- in the firm of the accused. The amount was transferred from complainant's ICICI Bank NRI Account to the account of the accused. The accused allotted 3,09,250 sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to pay the loan amount. The complainant filed an application before IG, NRI Wing, SAS Nagar, Mohali. The accused contacted the complainant and requested for some time with a promise that he will deposit the amount for the clearance of the cheque. Complainant believing the accused granted him further time. In the month of December, the accused again contacted the complainant and asked him to present the cheque for encashment with an assurance that the cheque will be honoured as and when presented for encashment. The complainant again presented the cheque through his brother and power of attorney holder with his bankers i.e. HDFC Bank Patiala, but the cheque was again dishonoured vide memo dated 13.12.2016. The complainant again contacted the accused, but the accused flatly refused to return the amount of cheque. Finding no alternative, the complainant had to initiate legal proceedings. [4]. The complainant has further alleged that by way of inducement, the accused had committed the offence of cheating. Due to aforesaid inducement, the complainant has to part with the property i.e. Rs. 2,43,73,000/- and the accused have dishonestly misappropriated the same. After receiving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... averments have been made which are mandatory in nature before invoking provisions of Section 141 of the Negotiable Instruments Act. Petitioner being a lady has no role to play with the day to day affairs of the company. Complainant has preferred not to make any such averment in the complaint and therefore, mandatory requirement in terms of Section 141 of the Negotiable Instruments Act has not been complied with. [9]. Learned counsel for the petitioner relied upon S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and another, 2005(4) RCR (Criminal) 141, K.K. Ahuja Vs. V.K. Vora and another, 2009(3) RCR (Criminal) 571, Standard Chartered Bank Vs. State of Maharashtra and others, 2016(2) RCR (Criminal) 778, Manalal Chamaria and another Vs. State of West Bengal and another, 2014(2) RCR (Criminal) 232 and Pooja Ravinder Devidasani Vs. State of Maharashtra and another, 2015(1) RCR (Criminal) 271 and contended that necessary averments ought to be contained in a complaint before a person can be subjected to a criminal process. A liability under Section 141 of the Negotiable Instruments Act is sought to be fastened vicariously on the petitioner as a Director of the company, the principal accuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied in this context. [11]. The persons who are sought to be made criminally liable under Section 141 of the Negotiable Instruments Act should be, at the time the offence was committed, incharge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were incharge of and responsible for the conduct of the business of the company at the time of commission of an offence, who will be liable for criminal action. It follows from this that if a Director of a company who was not incharge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable under the provision. The liability arises from being incharge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a company may be liable if he satisfies the main requirement of being incharge of and responsible for the conduct of the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t July, 2004 and had also executed a Letter of Guarantee on 19th January, 2005. The cheques in question were issued during April, 2008 to September, 2008. So far as the dishonor of Cheques is concerned, admittedly the cheques were not signed by the appellant. There is also no dispute that the appellant was not the Managing Director but only a non- executive Director of the Company. Non-executive Director is no doubt a custodian of the governance of the Company but does not involve in the day-to-day affairs of the running of its business and only monitors the executive activity. To fasten vicarious liability under Section 141 of the Act on a person, at the material time that person shall have been at the helm of affairs of the Company, one who actively looks after the day-to-day activities of the Company and particularly responsible for the conduct of its business. Simply because a person is a Director of a Company, does not make him liable under the N.I. Act. Every person connected with the Company will not fall into the ambit of the provision. Time and again, it has been asserted by this Court that only those persons who were in charge of and responsible for the conduct of the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mt. Manju Joon Vs. State of Haryana and others, 2009(1) RCR (Criminal) 363 and contended that the pleadings to the effect that the petitioner was active in business of the firm and satisfies the requirement of Section 141 of the Negotiable Instruments Act. The complaint cannot be quashed on the ground that there was no specific averment in the complaint that the petitioner was incharge and responsible to the firm for conduct of the business. Petitioner would be at liberty to prove before the Court that she was not responsible for conduct of the business of the firm and therefore, not liable. [16]. I have considered the controversy. [17]. After the decision of Smt. Manju Joon's case (supra), the Hon'ble Apex Court after relying upon S.M.S. Pharmaceuticals Ltd. case (supra) in K.K. Ahuja's case (supra), Standard Chartered Bank's case (supra) and Pooja Ravinder Devidasani's case (supra) has categorically reiterated the view expressed by the Hon'ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory statement in the complaint that Director is incharge and responsible to the company for the conduct of the business of the company without anything more. Rather in the instant case, no such averments have been made in respect of the petitioner being Director is also incharge and responsible to the company for the conduct of the business. The complaint must contain as to how and in what manner, the Director was incharge or was responsible to the company in conduct of its business. This should be in consonance with strict interpretation of penal statutes, especially, where such statute creates vicarious liability. [20]. In National Small Industries Corporation Vs. Harmeet Singh Paintal and another, 2010(3) SCC 330, the Hon'ble Apex Court has interpreted on the aforesaid lines that requirement in terms of pleading has to be construed not only to the extent of mentioning the Director to be incharge of and responsible to the company for doing its business, but strictly spell out as to how and in what manner, he was incharge and responsible for the conduct of its business. [21]. The provisions of Section 141 of the Negotiable Instruments Act are pari materia with the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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