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2009 Supreme(SC) 1160

R.V.RAVEENDRAN, MUKUNDAKAM SHARMA
K. K. Ahuja – Appellant
Versus
V. K. Vora – Respondent


Advocates appeared:
For the Appellant(s) :Rakesh Malhotra, Bipin K. Jha, hekhar Prit Jha, Advocates.
for the Respondent(s):S.K. Verma (NP), Advocate.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points:

  1. A Deputy General Manager is not automatically considered responsible to the company for the conduct of its business and therefore cannot be presumed to be in charge or responsible for the company's conduct (!) .

  2. For a person to be vicariously liable under section 141(1) of the Negotiable Instruments Act, 1881, it must be specifically averred that they were in charge of and responsible for the conduct of the company's business at the time of the offence (!) (!) .

  3. Mere involvement in the company's financial affairs or being in a managerial position, such as Deputy General Manager, does not automatically establish liability unless the complaint contains specific allegations of their role in the offence, including their consent, connivance, or negligence (!) (!) (!) .

  4. The complaint must contain clear and explicit averments demonstrating how and in what manner the accused was involved in or responsible for the offence, especially when alleging vicarious liability (!) (!) .

  5. When the offence involves a dishonoured cheque issued by a company, liability under section 141(1) is generally attributed to persons who are in overall charge of and responsible for the conduct of the company's business, such as managing directors or persons with similar responsibilities, not to other employees or officers who do not meet these criteria (!) (!) .

  6. For officers who are not in charge of the company's conduct, liability can only be established under section 141(2), which requires specific averments of their consent, connivance, or negligence (!) (!) .

  7. The law emphasizes strict compliance with statutory requirements for establishing liability, and vague or general allegations are insufficient to proceed against an individual (!) (!) .

  8. The order quashing the summons against a person who was not in charge of and responsible for the company's conduct, such as a Deputy General Manager, was upheld due to the absence of necessary averments and specific allegations of their involvement or negligence (!) (!) .

Please let me know if you need further analysis or assistance regarding this case.


JUDGMENT

R.V. Raveendran, J.—

The question as to who can be said to be persons “in-charge of, and was responsible to the company for the business of the company” referred to in section 141 of the Negotiable Instruments Act, 1881 (for short ‘the Act’) arises for consideration in this appeal by special leave by a complainant.

2. The appellant filed two complaints (Crl. Comp.No.58/2001 and 59/2001) in the Court of the Metropolitan Magistrate, Delhi, against M/s. Motorol Speciality Oils Ltd. (‘the Company’ for short) and eight others under section 138 of the Act. The first complaint was in regard to dishonour of five cheques (each for Rs.5,00,000/-, all dated 28.2.2001). The second complaint was in regard to dishonour of three cheques (for Rs.3 lakhs, 3 lakhs and 10 lakhs dated 31.10.2000, 30.11.2000 and 20.12.2000 respectively). The cheques were alleged to have been drawn in favour of the appellant’s proprietary concern (M/s Delhi Paints & Oil Traders) by the company represented by its Chairman. In the said complaints, the appellant had impleaded nine persons as accused, namely, the company (A-1), its Chairman (A-2), four Directors (A-3 to A-6) as also its Vice-President (Finance), Ge






















































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