Point of Law: Independent Directors - In case of Director or an officer of company, who signed cheque on behalf of company, there is no need to make a specific averment that, he was in charge of and was responsible to company, for the conduct of the business of company. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141.

JUDGMENT :

SANDEEP K. SHINDE, J.

1. Rule. By consent of the parties, taken up for hearing forthwith.

2. Petitioners in these two petitions, filed under Article 227 of the Constitution of India challenge the order dated 13th October, 2017 (In Writ Petition No. 3710/2018) and order dated 11th September, 2017 (in Writ Petition No. 3711/2018) passed in C.C. No. 7854/SS/2016 and C.C. No. 9698/SS/2016 respectively by the Metropolitan Magistrate, Mumbai by which the petitioners were summoned as accused in the complaint filed by the respondent no. 2 for alleged offences punishable under Section 138 read with Section 141 of the Negotiable Instruments Act (“Act” for short).

3. This Court vide order dated 16th August, 2019 rejected the petition qua petitioners no. 1 to 6 and 8.

4. Insofar as, petitioner nos. 7, 9 and 10 are concerned, it was argued that these petitioners being “Independent Directors” could not have been prosecuted under Section 138 read with Section 141 of the Act. On this point, the complainant was directed to verify the position and submit. Accordingly, the respondent no. 2 filed an Affidavit of one, Snehal Sane and submitted that petitioner nos. 7, 9 and 10 are “Independent Directors” of accused-Company and therefore the complainant is not desirous of pursuing the subject complaint filed against them.

5. In the fact situation, it is to be ascertained whether the complaint against petitioner no. 11 a Company Secretary of the accused Company, were maintainable or not.

6. Heard Counsel for the parties. Perused the complaints.

7. Learned Counsel for the petitioners would submit that under Section 141 of the Act, when a cheque issued by a company is dishonoured, in addition to company, following persons are deemed to be guilty of the offence and shall be liable to be proceeded against and punished:

(i) 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.

(ii) any Director, manager, secretary or other officer of the company with whose consent and connivance, the offence under Section 138 has been committed.

(iii) any Director, manager, secretary or other officer of the company whose negligence resulted in the offence under Section 138 of the Act, being committed by the company.

8. It is argued that, a person who is responsible to the company for the conduct of business of the company and is in-charge of the business of the company is vicariously liable by reason only of his fulflling the requirements of sub-section (1). It is thus submitted, if the person responsible to the Company for the conduct of business, was not in charge, of conduct of the business of the Company, then he can be made liable under Section 141(2) of the Act, only if the offence was committed with his consent or connivance or as a result of negligence. It is argued that, the complaint, does not aver that either the offence was committed with consent, knowledge or connivance of petitioner no. 11 nor it is alleged that, offence was result of negligence on the part of petitioner no. 11 nor there is a specific averment, that petitioner was in charge of conduct of business of the company and therefore, complaint against petitioner no. 11 were unsustainable.

9. Learned Counsel, in support of her contentions relied on the judgment of the Hon’ble Supreme Court in the case of K.K. Ahuja vs. V.K. Vora and Another, (2009) 10 SCC 48 wherein position under Section 141 of the Act has been summarized, thus:

(i) if the accused is the, Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of and is responsible to the company, for the conduct of the business of the company. It is sufficient, if averment is made that accused was the Managing Director or Joint Managing Director at the relevant time.

(ii) in the case of Director or an officer of the company, who signed the cheque on behalf of the company, there is no