Vicarious criminal liability requires that a complaint specifically aver that the accused individual was directly in charge of and responsible for the entity's business conduct. Absent such a factual nexus, mere designation is insufficient to sustain prosecution, and proceedings so initiated must be quashed to prevent abuse of process.

JUDGMENT :

UDAY KUMAR, J.

1. This is an application under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (formerly Section 482 of the Code of Criminal Procedure, 1973), seeking the quashing of proceedings in Complaint Case No. CN/608/2018, presently pending before the Learned 14th Judicial Magistrate, Calcutta.

2. The Petitioner, arrayed as Accused No. 4, challenges the legality of his prosecution under Sections 138 and 141 of the Negotiable Instruments Act, 1881, primarily on the ground that the complaint is "fatally barren" of the jurisdictional facts requisite to sustain vicarious liability.

3. The genesis of this litigation lies in a commercial transaction dating back to August 2013. The Complainant/Opposite Party No. 2, M/s. Garvit Consultancy Services Pvt. Ltd., purportedly extended a "temporary monetary accommodation" of Rs. 40,00,000/- carried an interest rate of 12% per annum, to the Accused No. 1 Company, M/s. Amrit Feeds Ltd. Following a default in 2017, the Complainant initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT), Kolkata.

4. During the pendency of the NCLT proceedings, a Settlement Agreement was executed on February 20, 2018. By virtue of this novation, the debt was consolidated at Rs. 37,00,000/-, and a series of Post-Dated Cheques (PDCs) were issued in discharge of the restructured liability. One such instrument, Cheque No. 245009, dated 01.07.2018 for Rs. 6,00,000/-, was returned unpaid with the remark "Funds Insufficient." Consequent to the service of the mandatory statutory demand notice and the failure of the Accused to liquidate the sum, the Complainant initiated the subject criminal proceedings.

5. While the Petitioner, Masud Tarif, is admittedly a Director of the Accused Company, it is equally a matter of record that he was neither a signatory to the dishonoured instrument nor a participant in the negotiations culminating in the Settlement Agreement of 2018. The Petitioner’s primary defense rests upon the assertion that he is a non-executive director, tasked exclusively with statutory compliance under the Companies Act, and possessed no nexus with the financial management or the debt-repayment mechanisms of the entity.

6. Subsequent to the issuance of process, the Petitioner moved an application for discharge before the Learned Magistrate, asserting that the complaint lacked the "foundational averments" necessary to fasten vicarious liability upon a non- executive director under the strictures of Section 141 of the NI Act. In an Order dated 30.09.2019, the Learned Magistrate noted the Complainant’s verbal admission that the complaint was indeed "silent" regarding the Petitioner’s specific role in the transaction.

7. However, the Learned Court below held that it was procedurally incapacitated from "recalling" its own summoning order, placing reliance on the restrictive mandates of the Hon’ble Supreme Court in Adalat Prasad v. Rooplal Jindal and Subramanium Sethuraman v. State of Maharashtra. This refusal to intervene, notwithstanding the acknowledged factual void in the pleadings, has compelled the Petitioner to approach this Court, seeking the exercise of its inherent power to prevent what is characteri