ORDER

The present application is filed by the petitioner, who is A-3, under Section 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.'), seeking to quash the proceedings against him in C.C.No.352 of 2004 on the file of IV Additional Munsif Magistrate, Guntur.

2. A private complaint was filed by the 1st respondent against the petitioner and others, alleging that the 1st accused is a firm carrying on business in cotton, 2nd accused is the Managing Director of the said firm, for which accused Nos.3 and 4 are Directors. It is alleged that all the accused have been actively participating in the day-to-day transaction of the company, and with the consent and knowledge of accused Nos.3 and 4, 2nd accused issued four cheques on behalf of the 1st accused. The said cheques, when presented, were returned due to insufficient funds. After complying with legal requirements as contemplated under the provisions of the Act, a private complaint came to be filed against the accused.

3. Learned counsel appearing for the petitioner mainly contends that even accepting the allegations in the complaint as true, no offence is made out against the petitioner, who was only a director of the company, and as such, continuation of proceedings against him would amount to an abuse of process of law.

4. Learned Public Prosecutor appearing for the 2nd respondent-State opposed the petition contending that in view of the allegations made against the petitioner, this Court should not invoke its inherent jurisdiction under Section 482 of the Code and interdict the proceedings. Though notice was sent to the correct address of the 1st respondent, the same could not be served. Hence, the counsel for the petitioner was permitted to serve notice on the counsel appearing for the 1st respondent in the trial Court. Accordingly, notice was served on the counsel for the 1st respondent appearing in the trial Court and proof of service is also filed.

5. Section 141(1) of the Negotiable Instruments Act (for short "the Act") reads as under :-

"If the person committing an offence under Section 138 is a company, every 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, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence".

Section 141 of the Act does not say that a Director of the company shall automatically be vicariously liable for commission of an offence by or on behalf of the company. What is necessary is that sufficient averments should be made to show that the person who is sought to be proceeded against on the premise of he being vicariously liable for commission of an offence by the company must be incharge of, and shall also be responsible to the company for the conduct of its business. Sub-section (2) of Section 141 fortifies the above reasoning because sub-section (2) envisages direct involvement of any Director, Manager, Secretary or other officer of a company in the commission of an offence. This section operates when in a trial it is proved that the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of these offices in a company. In such a case, such persons are to be held liable. Provision has been made for Directors, Managers, Secretaries and other officers of a company to cover them in cases of their proved involvement. In S.M.S. Pharmaceuticals Ltd., v. Neeta Bhalla and another (1) 2006 (1) ALT (Crl.) 29 (S.C.) = (2005) 8 SCC 89, the Apex Court held that the liability arises on account of conduct, act or omission on the part of a person and not merely on acco