TMI Blog2021 (3) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... ey are signatories to the cheque in question. Reliance placed in the case of SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [ 2005 (9) TMI 304 - SUPREME COURT] where it was held that The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under section 141. So far as signatory of a cheque which is dishonoured is concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be paid ₹ 97,500/- per year for a period of five years. Accordingly, respondent received a cheque bearing No.000093 for ₹ 97,500/- on 28/7/2015 issued by accused Nos.2 to 8 on behalf of accused No1-company for the period of first year. It is stated in the complaint that when the cheque was presented for encashment, it was returned and dishonoured. On account of the same, respondent presented a private complaint for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 3. The learned counsel appearing for the petitioners who are accused No.5, 7 and 8 in the private complaint submits that admittedly, accused No.1 is a company incorporated under the Companies Act, 1956 of which accused No.2 is Chai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the present petitioners is liable to be quashed. Para Nos.18 and 19 of the S.M.S. Pharmaceuticals LTd. Vs. Neeta Bhalla and Another reads as follows:- 18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany cannot be deemed to be in charge of and responsible to the company for the 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. (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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