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K. SURESH REDDY
Ramnarayam Jagadeesan, S/o Jagadeesan – Appellant
Versus
Sri Vijaya Sai Cottor Traders, Rep. By its partner Mr. Sure Srinivas Rao – Respondent
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.
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.
Specific averments showing the director's responsibility for the conduct of the company's business are necessary to establish liability under Section 141 of the Negotiable Instruments Act.
Directors cannot be held vicariously liable for a company's dishonoured cheque without specific allegations of their involvement in the company's operations, as required under Section 141 of the N.I.....
The necessity of specific averments in the complaint to establish the liability of the accused and the burden of proof on the accused to show lack of responsibility for the company's affairs.
Vicarious liability of a director in a company for dishonored cheques under Section 141 of the Negotiable Instruments Act.
The legal principle established is that a director's liability under Section 138 of the Negotiable Instruments Act is contingent upon being in charge of and responsible for the conduct of the company....
An individual in a company cannot be vicariously liable for criminal offenses under the NI Act unless they are responsible for the company's conduct at the time of the offense.
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