Specific averments showing a Director's responsibility for the conduct of the company's business are necessary to establish liability under Section 141 of the Negotiable Instruments Act, 1881.

ORDER :

The present Criminal Petition, under Section 482 Cr.P.C., is filed by the petitioner-accused No. 6 seeking to quash the proceedings against him in C.C.No. 821 of 2015 on the file of the Court of learned V Additional Junior Civil Judge, Guntur, registered for the offences punishable under Sections 138 to 142 of the Negotiable Instruments Act, 1881 (for short, 'the Act').

2. In the complaint, respondent No. 1-complainant, Managing Partner of M/s. Sri Vijaya Sai Cotton Traders, Guntur, alleged that accused Nos. 2 to 10 are Directors of accused No. 1 company i.e. M/s. Shri Renuga Textiles Limited and they are responsible for conduct of day-to-day business affairs of accused No. 1 company. Accused No. 1 placed orders on respondent No. 1 for supply of cotton. Pursuant to the aforesaid purchase orders, respondent No. 1 supplied cotton to accused No. 1. In discharge of its liability against the bills raised by respondent No. 1 on accused No. 1, the latter had issued a cheque bearing No. 625456 dated 22-02-2014 for a sum of Rs.23,81,764/- drawn on S.B.I., SME Branch, Theni, Chennai, Tamil Nadu State, in favour of the former. When respondent No. 1 presented the cheque in its bank i.e. South Indian Bank Limited, Koritepadu, Guntur, the same was dishonoured with the endorsement 'payment stopped by drawer'. On 21-05-2014, respondent No. 1 received intimation of dishonor of the cheque from its banker. Thereafter, respondent No. 1 got issued a legal notice on 14-06-2014 calling upon the accused to make payment of the amount of the dishonoured cheque as per the provisions of Section 138 of the Act. Alleging that the accused did not pay the amount of the dishonoured cheque i.e. Rs.23,81,764/- to respondent No. 1 within the time stipulated, the latter filed the aforesaid complaint under Sections 138 to 142 of the Act.

3. Heard Sri D.Vijay Kumar, learned counsel, representing Sri T.S.Anirudh Reddy, learned counsel appearing for the petitioner-accused No. 6, and learned Assistant Public Prosecutor appearing for the respondent-State. None appeared for respondent No. 1- complainant.

4. Sri D.Vijay Kumar, learned counsel, emphatically argues that the petitioner is an independent non –executive Director of the accused company and in no way responsible for the conduct of day-to-day affairs of the accused company; that he is inducted in the company for his expertise or special knowledge in particular discipline and he is not in charge of the management of the company and that except reproduction of the statutory requirements, the complaint did not specify or elaborate the role of the petitioner in the day to day affairs of the accused company and therefore he could not be criminally prosecuted for the dishonour of the cheque in question.

5. Learned Assistant Public Prosecutor appearing for the respondent-State, on the other hand, opposes the criminal petition and submits that the petitioner being Director of the accused company is liable to be criminally prosecuted with regard to the dishonour of the cheque in question.

6. This Court has perused the entire material available on record.

7. A Director of a company is liable to be convicted for an offence committed by the company if he/she was in charge of and was responsible to the company for the conduct of its business or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any negligence on the part of the Director concerned. In other words, for making a Director of a company liable for the offences committed by the company under Section 141 of the Act, there must be specific averments against the Director showing as to how and in what manner the Director was responsible for the conduct of the business of the company. A company may have a number of Directors and to make any or all the Directors as accused in complaint merely on the basis of a statement, that they are in charge of and responsible for the conduct of the business of the company, withou