Vague allegations and assumptions cannot lead to vicarious liability under Section 138 of the Negotiable Instruments Act.

1. In this petition, the petitioners who are accused 2 to 8 before the trial court are seeking to quash the entire proceedings in C.C.No.8736 of 1999 on the file of the XIV Metropolitan Magistrate, Egmore.

2. Theshort facts are:

The respondent/complainant filed a complaint under section 138 of the Negotiable Instruments Act (herein after referred to as the Act for short) against the petitioners and three others, as the cheque issued for Rs.24,99,840 had been dishonoured. Accused No.1 is the company and accused 9 and 10 are the signatories of accused No.1 except the bald allegation that the petitioners are directors, no overact has been attributed to them in the complaint. The complaint without even ascertaining the fact the petitioners 3 and 6 are dead and petitioners 4,5 and 7 have retired from the company two years ago, has filed the complaint. Petitioners 4,5 and 7 are only employees of the first accused company and they left the services of the company in 1997 itself, but they have been wrongly described as Directors of the company.

3. The learned counsel for the petitioners strenuously contended except the vague allegation in the complaint that the petitions are also responsible for the conduct of the business of the company and they are also liable for the offence committed by the first accused, there is no other material to show prima facie that there was any act committed by the petitioner, from which a reasonable inference can be drawn of their vicarious liability. It is pointed out not even the requirements as embodied in Section 141, sub-clause (2) of the Act, namely, the offence has been committed by the company with the consent or connivance and negligence in the part of the petitioners. It is argued that the allegations made in the complaint are most vague and therefore, no vicarious liability can be attached to the petitioners. The other contention that had been raised is without even ascertaining that petitioners 3 and 6 are dead and petitioners 4,5 and 7 have retired from the company two years ago, but the complaint has been filed in a mechanical and causal way. To substantiate the fact that petitioners 3 and 6 are dead and petitioners 4,5 and 7 retired from the company, a certified copy from No.32 issued by the company secretary has been produced for the perusal of this Court, which supports the case of the petitioners.

4. Though several decisions have been cited in support of the contentions raised in the petition, in my opinion it is suffice to refer the decision of the Supreme Court in Anil Hada v. Indian Acrylic Limited, 2000 (1) CTC 94 : 2000 (1) LW (Cri) 422 and the decisions reported in Alfred Borg and Co. India (P) Ltd. and 13 others v. Antox India (P) Ltd. 1992 LW (Crl) 120. In the Supreme Court case in paragraph 10 it had been laid down as follows:

"10. Three categories of persons can be discerned from the said provision who are brought within the purview of the penal liability through the legal fiction envisaged in section. They are: (1) The company which committed the offence, (2) Everyone who was in charge of and responsible for the business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company with whose connivance of due to whose neglect the company has committed the offence."

5. I find it difficult to agree with the learned counsel for the respondent/complainant that necessary and sufficient allegations have been made in the complaint that the petitioners are also responsible for the conduct of the day-to-day business and are equally guilty of the offence under section 138 of the Act and that it is for the trial court to find out whether the petitioners are also responsible for the day -to-day conduct of the business of the company and the same cannot be decided by this court. Considering the fact that petitioners 3 and 6 are dead already and petitioners 4,5 and 7 have retired form the company two years before, I am satisfied