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.

JUDGMENT/ORDER

1. This petition is filed by the petitioner-accused No.3 under Sec. 482 of Cr.P.C. for quashing the criminal proceedings in C.C.No.4639/2020, pending on the file of XXVIII ACMM, Bengaluru, arising out of PCR No.636/2020.

2. Heard the arguments of learned counsel for the petitioner and learned counsel for the respondent for respondent No.1.

3. The case of the petitioner is that the respondent has filed a private complaint under Sec. 200 of Cr.P.C. read with Sec. 138 of the Negotiable Instrument Act, 1881 (for short ' N.I. Act '), alleging that the cheque was issued by the company-accused No.1 and accused No.2 and 3 are the Directors of the company. The cheque was dishonored. Hence, the complaint came to be filed. The trial Court took the cognizance against accused Nos.1 to 3 and issued summons. Accused No.3-the present petitioner is challenging the criminal proceedings against him.

4. The learned counsel for the petitioner has contended that accused No.2 is the Managing Director of accused No.1-company. On behalf of accused No.1, accused No.2 has issued the cheque which was signed by accused No.2, therefore, the proceedings against accused No.3 is not sustainable. There is no specific averment made in the complaint that accused No.3 is responsible for day to day affairs. When there is no averment made in the complaint as required under Sec. 141(2) of N.I. Act, the criminal proceedings cannot be sustained against the petitioner. Hence, prayed for quashing the proceedings. In support of the arguments, the learned counsel for the petitioner has relied upon the judgment of the Hon'ble Supreme Court in the case of S.M.S. Pharmaceuticals Ltd., vs. Neeta Bhalla and Another reported in (2005) 8 SCC page 89.

5. Per contra, learned counsel for the respondent has objected the petition and contended that this petitioner is accused No.3, accused Nos.2 and 3 are the Managing Director and Director of the accused No.1- company. Though, accused No.2 was signatory to the cheque, but the cheque was issued for discharging the liability of the company. At paragraph No.4 of the complaint, it is categorically mentioned that they are the in charge of the day to day affairs of the company and the petitioner Nos.2 and 3 are none other than the son and father, it is their own family business. Therefore, both are responsible for the affairs of the company and responsible for discharging the liability of the company. Hence, prayed for dismissing the petition. The respondent Counsel relied upon the judgment of Supreme Court in the case of S.P. Mani and Mohan Dairy Vs. Dr. Snehalatha Elangovan reported in 2022 SCC OnLine SC 1238.

6. Having heard the arguments and on perusal of the records, the Hon'ble Supreme Court in the case of S.M.S Pharmaceuticals limited stated supra has held at paragraph No.19 of the judgment as under:

"19. In view of the above discussion, our answers to the questions posed in the reference are as under:

(a) It is necessary to specifically aver in a complaint under Sec. 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Sec. 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Sec. 141 cannot be said to be satisfied.

(b) The answer to the question posed in sub- para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Sec. 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Sec. 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.

(c) The answer to Question (c) has to b