JUDGMENT

(Prayer: Criminal Original Petition has been filed under Section 482 of Cr.P.C., to call for the records pertaining to the complaint pending in C.C.No.10799 of 2018 on the file of the Metropolitan Magistrate Cum Fast Track Judge-III, Madras and quash the same in so far as the petitioner is concerned as arbitrary, unsustainable in law and on facts.)

1. The petitioner herein is arrayed as the third accused in C.C.No.10799 of 2018 (on the file of Metropolitan Magistrate cum Fast Track Court No.III, Saidapet, Chennai), in a private complaint for offence under Section 138 of Negotiable Instruments Act, 1881.

2. The gist of the complaint runs as under:-

The petitioner is one of the Director of Gevika Agro Food (P) Ltd. Her company borrowed business loan of Rs.25 lakhs from the complainant Bank and agreed to repay the loan in equated monthly instalment. The Managing Director of the Company Mr.Kalyankumar and this petitioner as a Director given personal guarantee for the repayment. To discharge the loan the company issued cheque dated 23/05/2018 for Rs.25,68,310/- signed by the Managing Director of the company Mr.Kalyankumar. The cheque was presented for collection on 23/05/2018, but returned with endorsement “ Payment Stopped by drawer”. The statutory notice dated 06/06/2018 was sent to; (i) M/s Gevika Agro Food (P) Ltd; (ii) its managing director Mr. Kalayakumar /the signatory of the cheque; and (iii) the Director, Mrs. Ravathy (the petitioner herein). The notice was received by them on 09/06/2018. Having failed and neglected to pay the cheque amount, the complaint was lodged.

3. The petitioner in her quash petition had contended that she is not actively involved in the affairs of the company and hence, the case as lodged against her is not maintainable. The cheque was not issued with her knowledge. In the complaint, there is no specific averment about the knowledge and consent of the petitioner for issuing the cheque. Only a sweeping statement been made to include all the Directors of the company liable and for action.

4. In support of the petition, the learned counsel for the petitioner rely upon the judgments of the Hon'ble Supreme Court, to buttress his argument that in the absence of specific averment that the petitioner as a Director was in-charge of the company and responsible for the conduct of the business of the company as found in Section 141(1) of the Negotiable Instruments Act, 1881, the complaint is liable to be quashed as against this petitioner.

5. Heard the learned counsel appearing for the petitioner. Complaint and the judgments cited perused.

6. In the complaint at paragraph (3), how the liability occurred is narrated. The complainant is a banking institution. The first accused is the Company which has availed loan from the complainant Bank. The second accused is the Managing Director and the third accused is the Director. While availing loan, both the second and third accused have executed guarantee letter for prompt repayment of the loan. To discharge the loan the subject cheque signed by the Second accused was issued. The accused had instructed their bank to stop payment. In the complaint at paragraph (6) it is averred that the 2nd and 3rd accused being the Directors of the first accused company are responsible to the conduct of the business and as under Section 141 of Negotiable Instruments Act, 1881 deemed to be guilty of the offence.

7. In Ashoke Mal Bafna –vs- Upper India Steel Manufacturing and Engineering Company Limited reported in [(2018) 14 SCC 202], the Hon’ble Supreme Court had held as below:-

“9. To fasten vicarious liability under Section 141 of the Act on a person, the law is well settled by this Court in a catena of cases that the complainant should specifically show as to how and in what manner the accused was responsible. Simply because a person is a Director of a defaulter Company, does not make him liable under the Act. Time and again, it has been asserted by this C