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K SURESH REDDY
M. Vara Lakshmi W/o. Satyanarayana Choudary – Appellant
Versus
Laxmi srinivasa enterprises – Respondent
ORDER :
K.SURESH REDDY, J.
Accused No.7 in C.C.No.464 of 2014 on the file of the learned Judicial First Class Magistrate, Alamuru, East Godavari District, filed the present criminal petition, under Section 482 Cr.P.C., seeking to quash the proceedings against her in the said C.C.
2. The aforesaid C.C. has been registered against the petitioner/A7 and other accused for the offences punishable under Sections 138 and 142 of the Negotiable Instruments Act, 1881 (for short, 'the N.I. Act'), on the basis of a private complaint filed by respondent No.1 herein.
3. The contents of the complaint filed by the 1st respondent/complainant, in brief, are as under:
Complainant is carrying on trade in waste paper. Accused No.1 is a Private Limited Company having its registered office at D.No.12-1/B, Sanagam Road, Tapeswaram Village, Mandapeta Mandal, owning a paper board unit based on waste paper. Accused No.2 is the Managing Director and accused Nos.3 to 8 are Directors of accused No.1-Company. During the course of business, accused No.1-Company purchased waste paper from the complainant from about 06.06.2010 on credit and made part payments from time to time and as per the regularly maintained account
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.....
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.
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....
The main legal point established in the judgment is the requirement for specific averments in the complaint to establish vicarious liability and the need for such liability to be pleaded and proved, ....
For vicarious liability under Section 141 of the Negotiable Instruments Act, specific averments regarding a director's involvement in company affairs are essential; mere directorship is insufficient.
Dishonour of cheque – Offence by company – If person responsible to company for conduct of business of company, was not in charge of conduct of business of company, then he can be made liable only if....
A director who has resigned prior to the issuance of a cheque cannot be held vicariously liable for its dishonor under Section 138 of the N.I. Act.
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