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TMI Blog2014 (10) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 84,822/- drawn on Kotak Mahindra Bank Ltd. On presentation, cheque No. 001539 and 001541 were dishonoured with the remarks 'funds insufficient'. Despite service of statutory notice dated 30.08.2012, the accused persons failed to make payment of the amount of cheques. 3. Vide order dated 29.09.2012, learned trial Court took cognizance and summoned the accused persons including the petitioners who are accused Nos. 13, 11, 9 and 6 in complaint case bearing No. 422/1/12. 4. Since all the four petitions are arising out of the common order dated 29.09.2012 passed by learned trial Court in CC No. 422/1/12, therefore, all the petitions are disposed of by this common order. 5. Learned counsel for the petitioners contends that in Crl.M.C. No. 1821/2013, petitioner Sudeep Jain is Company Secretary in the accused Company namely, M/s. GEI Industrial Systems Ltd. The accused company has issued a certificate dated 10.12.2012 stating that the petitioner Sudeep Jain is working as a Company Secretary and his job portfolio is to ensure proper observance and compliances made by the said company and the petitioner is not responsible for day-to-day functioning of the said company and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minated 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.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attribute to, any neglect on the part of, any director, Manager, secretary, or other office of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation: For the purpose of this section, - (a) "company" means anybody corporate and includes a firm or other association of individuals; and (b) "director", in relating to a firm, means a partner in the firm." 11. On perusal of proviso of Section 141 of the NI Act, it is manifestly clear that what is required is that the persons who are sought to be made vicariously liable for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words: '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, etc.' What is required is that the persons who are sought to be made criminally liable under Section 141 should be, at the time the offence was committed, in charge 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 in charge of and responsible for the conduct of 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 in charge 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 in charge of and responsible for the conduct of business of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial." 17. This aspect of the matter has also been considered by the Apex Court in Sabitha Ramamurthy v R.B.S. Channabasavaradhya (2006) 10 SCC 581:- "Section 141 raises a legal fiction. By reason of the said provision, a person although is not personally liable for commission of such an offence would be vicariously liable therefor. Such vicarious liability can be inferred so far as a company registered or incorporated under the Companies Act, 1956 is concerned only if the requisite statements, which are required to be averred in the complaint petition, are m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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