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ABHAY S. OKA, UJJAL BHUYAN
Hitesh Verma – Appellant
Versus
Health Care at Home India Pvt. Ltd. – Respondent
Question 1? Question 2? Question 3?
Key Points: - The appellant, not being a signatory to the cheque, cannot be held liable under Section 138 unless the requirements of Section 141 are met. (!) - For vicarious liability under Section 141(1), a complaint must allege that at the time of the offence the person was in charge of and responsible to the company for the conduct of its business; both ingredients are required. (!) - There must be a specific allegation that the accused was in charge of the business at the time of the offence; absence of this defeats prosecution under Section 138 via Section 141. (!) - The court held that the impugned orders taking cognizance are set aside as against the appellant (accused no.3) for lack of required allegations under Section 141(1). (!) - The Appeals are allowed on the stated terms, leaving merits of the complaints to be decided by the Trial Court. (!)
ORDER :
1. Leave granted.
2. Heard the learned counsel appearing for the parties.
3. The appellant is arraigned as accused no.3 in the complaints filed by the first respondent under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the 1881 Act”). Admittedly, the appellant is not a signatory to the cheque. Paragraphs 4 and 5 of the complaints subject-matter of these Appeals are similar which read thus:
5. It is stated that the Accused No.2 and Accused No.3 are the Directors and Authorized Signatories of the Accused No.1 and are solely responsible for the day to day business activities and operations of Accused No.1. It is pertinent to note that the Accused No.2 under inst
A non-signatory director cannot be held liable under Section 138 of the Negotiable Instruments Act unless the complaint alleges their responsibility for the company's conduct at the time of the offen....
A Company Secretary, who is not involved in the day-to-day affairs of the company and is not responsible for the conduct of its business, cannot be held criminally liable for a dishonored cheque issu....
A non-signatory to a cheque cannot be prosecuted under Section 138 of the Negotiable Instruments Act for cheque bounce, as liability is limited to the cheque's drawer.
Independent Directors - In case of Director or an officer of company, who signed cheque on behalf of company, there is no need to make a specific averment that, he was in charge of and was responsibl....
A director's liability for dishonored cheques under the Negotiable Instruments Act is contingent upon their active management role at the time of issuance.
A complaint under Section 138 must contain specific averments to establish vicarious liability; mere title or position is insufficient for liability. Absence of allegations against an accused leads t....
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