Directors of a company are not liable for prosecution under Section 138 of the Negotiable Instruments Act unless there are allegations that they were in charge of the management of the company at the time of the issuance of the cheques.

( 1 ) THESE two petitions have been filed under Section 482 Cr. PC to quash the proceedings in CC No. 1095/96 and CC No. 17/97 respectively on the file of V Metropolitan Magistrate, Hyderabad.

( 2 ) THE petitioners herein arc A7 and A4 respectively in both the cases and the 1st respondent herein is the complainant and respondents 2 to 6 are the other accused in the said cases.

( 3 ) AS the parties are the same and the point involved in both the petitions is the same, these petitions are being disposed of by a common order.

( 4 ) THE 1st respondent herein is a Limited Company and it manufactures the equipments relating to Telecommunications and allied activities. The 1st respondent filed the complaint in CC No. 1095/96 against these petitioners and respondents 2 to 6 herein for the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter called as Act ). It is alleged in the complaint tiiat during the course of business, the 1st accused company represented by other accused borrowed a sum of Rs. 37. 78 lakhs as Inter Corporate Deposit from the complainant and in discharge of that debt together with interest thereon, the 1st accused company represented by A2 who is its Managing Director, issued the cheque bearing No. 262804, dated 8-10-1996 for Rs. 4646380 drawn on Union Bank of India, Sawkarpet branch, Madras. The complainant deposited the said cheque for realisation in its Banker, State Bank of Hyderabad, Industrial Finance, Branch, Panjagutta, on 28-10-96, but the said cheque was dishonoured due to "insufficiency of funds" in the account and the same was informed to the complainant by its Banker through the debt voucher dated 13-11-96 which was issued basing on the memorandum, dated 28-10-96 issued by the Union Bank of India, Sawkarpet, Madras. Thereafter, legal notice, dated 14-11-96 was issued to all the accused calling upon them to repay the outstanding amount of Rs. 46,46,380. 00with interest at the rate of 26% per annum within 15 day of receipt of the said legal notice. The said notice was served on all the accused on 18-11-96. The 1st accused issued reply notice, dated 20-11-96 and the said reply notice was received by the Counsel for the complainant on 30-11-1996. Thereafter, the complaint has been filed on 5-12-96, The learned Magistrate took the case on file and issued the process for the appearance of the petitioners and other accused. The petition in Crl. P. No. 3584/97 has been filed to quash the proceedings in CC No. 1095/96 against the petitioners herein.

( 5 ) THE 1st respondent in Criminal Petition No. 3585/97 filed the complaint in CC No. 17/97 against the petitioners and respondents 2 to 7 for the offence under Section 138 of the Act alleging that the 1st accused, company represented by other accused, borrowed a sum of Rs. 20,00,000. 00as Inter Corporate Deposit from the complainant and in discharge of that debt,, the 2nd accused representing the 1st accused-company issued the cheque bearing No. 262804, dated 15-10-1996 for a sum of Rs. 24,20,000. 00towards the principal and interest drawn on Union Bank of India, Sawkarpet branch, Madras. The said cheque was presented by the complainant in its Bank i. e. , State Bank of Hyderabad, Industrial Finance, Panjagutta, Hyderabad on 26-10-96, but the said cheque was dishonoured due to insufficiency of funds in the account of the accused, and the same was informed to the complainant by its branch through debt voucher dated 13-11-96 which was based on the memorandum dated 28-10-96 issued by Union Bank of India, Sawkarpet branch, Madras. Thereafter, the complainant got a legal notice, dated 14-11-96 issued to all the accused calling upon them to repay the outstanding amount of Rs. 24,20,000. 00 with interest at the rate 24% per anum within 15 days of receipt of said legal notice. The said notice was served on all the accused on 18-11-96. The 1st accused alone issued a reply, dated 20-11-96 and the said reply was received by th