Mere directorship in a company does not automatically entail vicarious liability under Section 138 of the Negotiable Instruments Act; however, allegations of involvement in day-to-day business, consent, and connivance in the offense are sufficient to constitute an offense under the Act.

( 1 ) IT appears that a complaint has been filed against the present petitioners along with another accused under Section 138 read with Section 141 of the negotiable Instruments Act. The prosecution is being challenged by way of this petition under Section 482 Cr. P. C. solely on the ground that there are no offences disclosed against the petitioners who are accused Nos. 2 and 4. It is argued by the learned Counsel for the petitioners that it is not sufficient to be a Director of a Company for having vicarious liability under Section 138 of the negotiable Instruments Act but such Director should be involved in day to day business before any liability can be fastened on him, under Section 138 of the negotiable Instruments Act. He relies on a judgment of this Court reported in secunderabad Health Care Vs. Secunderabad Hospital. This judgment is based on the judgment of the Supreme Court being State of Haryana vs. Brij Lal Mittal.

( 2 ) BEFORE appreciating the law laid down by this Court and also by the supreme Court, it will be curious to note what are the allegations levelled against the petitioners. Para 6 of the complaint is reproduced as below. "the complainant submits that the above notice was received by the accused Nos. 2 and 3 on 6-5-1996 as per the postal acknowledgement. The postal acknowledgement from accused Nos. 1 and 4 are awaited. The accused had 15 days time from that date i. e. , on or before 21-5-1996 to pay up the said amount which they have failed and neglected to do thereby committing an offence under Section 138 of the Negotiable Instruments act, 1881. The accused No. 1 is a company and accused No. 2 is the Director and accused No. 3 is the Managing Director who is incharge of and responsible to the company for its day to day affairs and accused No. 4 is an Executive Director of accused No. 1 company. The offence has been committed with the consent and connivance of accused Nos. 2,3 and 4. Therefore accused Nos. 2,3 and 4 are also responsible and liable along with accused No. 1 for the above offence. "in the light of the allegations in para 6 of the complaint it will be interesting to note the facts which led to the judgment of the learned single Judge of this Court. The facts have been revealed by the judgment in para 12 which are reproduced as follows:"there is no whisper in the complaint against respondents 3 to 7. It is not even averred that they are aware of the second accused issuing cheques in question to the complainant. It is not even alleged that they are involved in day to day management of the affairs of the company. Nothing is stated as to in what way they shall be deemed to be guilty of the offences committed by the first accused company. The sworn statement of the complainant recorded at the time of taking cognizance also does not reveal anything against the petitioner accused 3 to 7. For the aforesaid reasons the process ought not to have been set in motion as against the petitioners accused 3 to 7. The allegations levelled against the first and second petitioners are clear. The second petitioner admittedly was the Managing director and was incharge of the company. The truth or otherwise of the allegations levelled against even the petitioners 1 and 2 in the complaint is a different matter altogether. "it is manifestly clear that mere was no whisper in the complaint against the accused. It had never been averred that the accused were aware that one of the accused had issued a cheque to the complainant. The facts of the case are altogether different where it has been averred that accused No. 2 is the Director and accused No. 3 is the Managing Director and is also incharge of and responsible to the company for its day to day affairs. It is also stated that accused no. 4 is an Executive Director of the Company. Further it has been stated in the complaint that the offence had been committed with the consent and connivance of the accused Nos. 2,3 and 4. Whether this is a fact or no