TMI Blog2022 (6) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... companies. It provides that 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 shall be liable to be proceeded against and punished accordingly. The Hon'ble Supreme Court considered Section 141 in the judgment relied by learned counsel for the applicants in the case of SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [ 2005 (9) TMI 304 - SUPREME COURT] and held that the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiable Instruments Act, 1881, Police Station-Sector-39, District-Gautam Budh Nagar. 3. The sole argument advanced by learned counsel for the applicants is that only authorized signatory/signatory of the cheque is responsible on account of bouncing of the cheque. The Company and other Directors cannot be held responsible. However, all have been summoned. Therefore the applicants are constrained to approach this court by means of the present application. He relied on a judgment of Hon'ble Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. Versus Neeta Bhalla and another; (2005) 8 SCC 89. 4. Learned A.G.A. opposed the submissions of learned counsel for the applicants and submitted that under Section 141 of Negotiable Instrument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 shall be liable to be proceeded against and punished accordingly. Section 141 of the Negotiable Instruments Act 1881 is extracted below:- 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 shall be liable to be proceeded against and punished accordingly: Prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us Neeta Bhalla and another; (2005) 8 SCC 89 (Supra) and held that the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable. Relevant paragraphs 10 to 12 are extracted below:- 10. While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. The key words which occur in the Section are every person . These are general words and take every person connected with a company within their sweep. Therefore, these words hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irs of a Company and not on designation or status. If being a Director or Manager or Secretary was enough to cast criminal liability, the Section would have said so. Instead of every person the section would have said every Director, Manager or Secretary in a Company is liable #..etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action. 11. A reference to sub-section (2) of Section 141 fortifies the above reasoning because sub-section (2) envisages direct involvement of any Director, Manager, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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