IMPORTANT POINT
To launch prosecution for offence by a Company and its Directors, there must be specific allegation in complaint as to part played by them in the transaction.

G.M. Akbar Ali, J.— By consent of both sides, the matter has been taken up for final hearing. The petitions are filed seeking a direction to call for the records in C.C.Nos.2561, 2560 and 5268 of 2010 on the file of the learned XIII M.M, Egmore, Chennai, and IX M.M, Saidapet Chennai and quash the same.

2. The petitioner is arrayed as accused number four in a criminal complaint lodged by the respondent under Sec.138 read with Sec.141 of the Negotiable Instruments Act (hereinafter referred to as “Act”) before the Court of the learned XIII M.M., and IX M.M at Saidapet, Chennai.

3. The respondent/complainant is a private limited company having its Office at Chennai. The first accused one, M/s ORG Informatics Limited is also a company incorporated and represented by its Managing Director and other Directors who have been arrayed A2 to A6. In pursuant to a Memorandum of Understanding between the complainant company and the accused company, the accused Company placed purchase orders and issued various cheques signed by the authorised signatory/A3. The following are the cheques issued by the accused company which are subject matters of Section 138 N.I. Act proceedings against which criminal OPs are initiated:

Crl.O.P.No.20185 of 2010

Cheque No. Date

267107 31.8.2009

267111 31.8.2009

267108 31.8.2009

Crl.O.P.No.20184 of 2010

267106 31.8.2009

267103 31.8.2009

Crl.O.P.No. 20489 of 2010

267148 16.8.2009

267147 16.8.2009

174601 16.8.2009

4. The cheques were drawn on ICICI Bank, New Delhi. The complainant company presented these cheques on various dates with their bankers, M/s Axis Bank Limited, Mount Road, Madras. The cheques were returned with an endorsements “payment stopped by the drawer” and “account frozen”. Therefore, the complainant company issued statutory notice on various dates calling upon the accused company and its Directors to pay the entire cheque amount within 15 days as per the provisions of the Act. The Company and the other Directors received the notice. The petitioner sent replies to all these notices stating that he is only a non-executive Director and he was not in-charge and was not responsible to the Company for conduct of the business and he had no knowledge about the transaction and issuance of cheques and thereby he denied the liability. Since the payments were not made within the stipulated time, the complainant company has initiated the abovesaid proceedings. Aggrieved by taking cognizance against the petitioner, he is before this court to quash the proceedings invoking the jurisdiction under Section 482 Cr.P.C.

5. The points raised in all these petitions are same viz; whether the petitioner was in-charge and responsible to the conduct of the business of the Company and whether necessary allegations are made in the complaints to proceed against the petitioner for an alleged offence under Section 138 read with Section 141 of the Act.

6. Since a common point is raised in all these petitions, they are disposed of by a common order.

7. Mr. Habibullah Badsha, learned senior counsel who appeared for M/s Sivanandaraj and Aparna Mukerjee, would submit that merely being a Director of the Company would not make a person liable for the dishonour of the cheque issued by the accused Company. The learned senior counsel pointed out that for launching a prosecution against the petitioner, there must be specific allegation in the complaint as to the part played by the petitioner. In the absence of any such allegation, the liability cannot be fastened on a Director who is designated as non-executive Director. The learned senior counsel pointed out that in the complaint, a general statement was made that A2 to A6 are in charge and responsible for the day-to-day operation as well as responsible for taking all financial and policy decisions of A1 company. According to the learned Senior counsel except this vague allegation, there is no other averments regarding the part played by the petitioner in .the transaction for a vica