TMI Blog2023 (9) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... , the continuation of the proceedings as against the petitioners will only result in abuse of process of Court, which requires the interference of this Court in exercise of its jurisdiction u/s.482 Cr.P.C. These Criminal Original Petitions are allowed. - THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH For the Petitioners : Mr.H.Siddharth [in both petitions] For the Respondent : Mr.E.Om Prakash, Senior Counsel [in both petitions] for Mr.M.Arunachalam ORDER These Criminal Original Petitions have been filed to quash the proceedings in C.C.No.2337 of 2019 pending on the file of FTC-IV, Metropolitan Magistrate, George Town, Chennai. 2. The respondent has filed a complaint u/s.138 of the Negotiable Instruments Act against the company and its directors. The petitioners have been arrayed as A4 and A6 respectively in the complaint. According to the petitioners, they are non-executive directors and they are not involved in the day-to-day affairs of the company and in spite of the same, they have been added as accused in the complaint. Aggrieved by the same, the present petitions have been filed before this Court under Section 482 of the Code of Criminal Procedure, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond suspicion or doubt. 6. If the petitioners are to be roped in as accused persons in spite of the fact that they are non-executive directors, the complaint must make it clear as to how and in what manner they are in charge or responsible for the day-to-day affairs of the company. This Court had an occasion to consider the entire law on the issue in Anil Pathak and another v. Larsen and Toubro Limited [2019 (1) MLJ (Crl.) 385] and the relevant portions are extracted hereunder: 12. From the above said judgments, it is very clear that it is not enough if the words used under Section 141 of the Negotiable Instruments Act, is merely extracted. In order to make a Director of a Company is liable for the offence committed by the Company under Section 141 of the Negotiable Instruments Act, there must be a specific averment against the Director to show as to how and in what manner the Director was responsible for the conduct of the business of the Company. This composition has been reiterated by the Hon'ble Supreme Court consistently. 13. The learned counsel for the respondent by relying upon the judgment of the Hon'ble Supreme Court in Gunmala Sales Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary to specifically aver in the complaint that the Director was in charge of and responsible for the conduct of the company s business at the relevant time when the offence was committed. It says that this is a basic requirement. And as we have already noted, this averment is for the purpose of persuading the Magistrate to issue process. If we revisit SMS Pharma-(1), we find that after referring to the various provisions of the Companies Act it is observed that those provisions show that what a Board of Directors is empowered to do in relation to a particular company depends upon the roles and functions assigned to Directors as per the memorandum and articles of association of the company. There is nothing which suggests that simply by being a Director in a company, one is supposed to discharge particular functions on behalf of a company. As a Director he may be attending meetings of the Board of Directors of the company where usually they decide policy matters and guide the course of business of a company. It may be that a Board of Directors may appoint sub-committees consisting of one or two Directors out of the Board of the company who may be made responsible for the day-to-day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time and therefore making him stand the trial would be abuse of the process of court as no offence is made out against him. 34. We may summarize our conclusions as follows: 34.1. Once in a complaint filed under Section 138 read with Section 141 of the NI Act the basic averment is made that the Director was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, the Magistrate can issue process against such Director; 34.2. If a petition is filed under Section 482 of the Code for quashing of such a complaint by the Director, the High Court may, in the facts of a particular case, on an overall reading of the complaint, refuse to quash the complaint because the complaint contains the basic averment which is sufficient to make out a case against the Director. 34.3. In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were in charge and responsible for the affairs of the company and for the conduct of the business. A mere bald statement to the effect that they are in charge and responsible for the day-to-day affairs of the company is not sufficient. 8. In view of the same, this Court is convinced that the complaint does not satisfy the requirements u/s.141 of the Negotiable Instruments Act and the petitioners, being non-executive directors, cannot be roped in as accused persons without there being a specific plea as to how and in what manner they were in charge and responsible for the conduct of the business of the company. Hence, the continuation of the proceedings as against the petitioners will only result in abuse of process of Court, which requires the interference of this Court in exercise of its jurisdiction u/s.482 Cr.P.C. In the result, these Criminal Original Petitions are allowed and the proceedings in C.C.No.2337 of 2019 pending on the file of FTC-IV, Metropolitan Magistrate, George Town, Chennai, is quashed insofar as the petitioners herein are concerned. The Court below is directed to proceed further with the complaint and complete the proceedings within a period of six ( ..... 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