TMI Blog2023 (10) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to be guilty of the offence and shall be liable to be proceeded against and punished. The averments in the complaint filed by the respondent are not sufficient to satisfy the mandatory requirements under Section 141(1) of the NI Act. Since the averments in the complaint are insufficient to attract the provisions under Section 141(1) of the NI Act, to create vicarious liability upon the appellant, he is entitled to succeed in this appeal. The appellant has made out a case for quashing the criminal complaint in relation to him, in exercise of the jurisdiction under Section 482 of Cr.PC. Appeal allowed. - C. T. Ravikumar And Sanjay Kumar , JJ. For the Appellant : Mr. Wills Mathews, Adv. Mr. Dhanesh M Nair, Adv. Mr. Paul John Edison, Adv. Ms. Shweta Garg, AOR For the Respondent : Mr. Vipin Kumar Jai, AOR JUDGMENT C.T. RAVIKUMAR , J. 1. Leave granted. 2. This Appeal by accused No.4 in the complaint filed by the respondent herein under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 (for short the NI Act ) is directed against the order dated 06.12.2019 in CRM-M No.52299 of 2019 passed by the High Court of Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nr. 2023 INSC 692 and connected cases dated 03.08.2023 to buttress the said contentions. 6. Per Contra, learned counsel appearing for the respondent would submit that paragraphs 3 and 4 of the complaint would reveal that the averments thereunder are sufficient to satisfy the mandatory requirement in terms of Section 141 of the NI Act, qua the appellant as well. In order to support his contention the learned counsel relied on the decision of a two-Judge Bench of this Court in S.P. Mani and Mohan Dairy v. Dr. Snehalatha Elangovan 2022 SCC OnLine SC 1238 . 7. In view of the rival contentions as above it is apposite to refer to the averments in paragraph 3 and 4 of the complaint, which is annexed to the SLP. They read thus: 3. That the accused No.1 is a partnership-firm with the name and style of M/s Tile Store, having its office at 5-654/B, Jyothis Complex, By-pass Road, Eranhipalam, Calicut-673006 (Kerala), while accused No.2 to 6 are the partners of the accused No.1. The accused No.2 to 6 being the partners are responsible for the day to day conduct and business of the accused No. 1. 4.That the accused No.1 through its partners i.e. accused No.2 to 6, on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: 22 [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] 9. Bearing in mind the averments made in the complaint in relation to the role of the appellant and subsection (1) of Section 141, we will have to appreciate the rival contentions. Going by the decision relied on by the respondent in S.P. Mani s case (supra) it is the primary responsibility of the complainant to make specific averments in the complaint, so as to make the accused vicariously liable. Relying on paragraph 47(b) of the said decision learned counsel appearing for the respondent would also submit that the complainant is supposed to know only generally as to who were in charge of the affairs of the company or firm, as the case maybe and he relied on mainly the following recitals thereunder: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that in a complaint filed under Section 138 read with Section 141 of the N.I. Act to constitute basic averment it is not required to aver that the accused concerned is a person who was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed. In paragraph 43 of S.P. Mani s case (supra) it was held thus: 43. In the case on hand, we find clear and specific averments not in the complaint but also in the statutory notice issued to the respondent. It is thereafter that in the decision in S.P. Mani s case (supra) in paragraph 47 (a) it was held that the primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable. 12. Bearing in mind the afore-extracted recitals from the decisions in Gunmala Sales Private Limited s case (supra) and S.P. Mani s case (supra), we have carefully gone through the complaint filed by the respondent. It is not averred anywhere in the complaint that the appellant was in charge of the conduct of the business of the company at the relevant time when the offence was committed. What is stated in the complai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he or she was in charge of and was responsible to the company for conduct of its business is not sufficient. (Vide National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal). In the case on hand, particularly, in Para 4 of the complaint, except the mere bald and cursory statement with regard to the appellant, the complainant has not specified her role in the day-to-day affairs of the Company. We have verified the averments as regards to the same and we agree with the contention of Mr. Akhil Sibal that except reproduction of the statutory requirements the complainant has not specified or elaborated the role of the appellant in the day-to-day affairs of the Company. On this ground also, the appellant is entitled to succeed. 15. Paragraph 19 of the Ashok Shewakramani s case (supra) is also relevant for the purpose of the case and it, in so far as relevant, reads thus: 19. Section 141 is an exception to the normal rule that there cannot be any vicarious liability when it comes to a penal provision. The vicarious liability is attracted when the ingredients of subsection 1 of Section 141 are satisfied. The Section provides that every person who at the time the offence wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely because somebody is managing the affairs of the company, per se, he would not become in charge of the conduct of the business of the company or the person responsible to the company for the conduct of the business of the company. A bare perusal of Section 141(1) of the NI Act, would reveal that only that 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 alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished. In such circumstances, paragraph 20 in Ashok Shewakramani s case (supra) is also relevant. After referring to the Section 141(1) of NI Act, in paragraph 20 it was further held thus: 20 On a plain reading, it is apparent that the words was in charge of and was responsible to the company for the conduct of the business of the company cannot be read disjunctively and the same ought be read conjunctively in view of use of the word and in between. 17. The upshot of the aforesaid discussion is that the averments in the complaint filed by the respondent are not sufficient to satisfy the man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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