The legal principle established is that a person nominated as a Director of a company by virtue of his employment with a government undertaking may not be liable for prosecution under Section 138 of the Negotiable Instruments Act, as per Section 141 of the Act.

Hari Pal Verma, J.

Prayer in this petition filed under Section 482 Cr.P.C. is for quashing of complaint No.865 dated 7.10.2013, under Section 138 of the Negotiable Instruments Act, 1891 read with Section 420 IPC (Annexure P-1). Challenged has been made to the order dated 9.10.2013 (Annexure P-2) whereby learned Judicial Magistrate 1st Class, Ludhiana while recording the preliminary evidence of the complainant vide affidavit Ex.CA along with exhibited documents C1 to C32/1 has summoned the accused including the petitioner to face trial in the complaint.

2. Learned counsel for the petitioner while referring to the memo of complaint and para 2 of the complaint submitted that the petitioner namely Jayaram Ramanadham is a nominee Director of Vybra Automet Limited, the accused company. The petitioner is working as Manager (Legal and Accounts) with Andhra Pradesh Industrial Development Corporation Limited, the State Government undertaking and it is by virtue of that office, the petitioner was nominated as one of the Director, which is required under the Companies Act. He submits that in fact an investment agreement dated 01.10.2005 was entered between Andhra Pradesh Industrial Development Corporation Limited and M/s Vybra Automet Limited and as per the investment agreement, the Andhra Pradesh Industrial Development Corporation, a company registered under the Companies Act, 1956, was given a right to appoint a minimum one Director and the nominee of the APIDC Ltd. Learned counsel for the petitioner while referring Section 141 of the Negotiable Instruments Act, 1881 submits that in view of the second proviso where a person is nominated as Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this chapter. For reference provision of Section 141 of the Negotiable Instruments Act, 1881 is reproduced as under

"141. Offences by companies. (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:

[Provided further that where a person nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.]

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly,

Explanation.-For the purposes of this section,-

(a) "company" means any body corporate and includes a firm or other association of individuals; and

(b) "director", in relation to a firm, means a partner in the firm."

3. He further submits that despite there being a specific bar under the Act, the petitioner has been ordered to be summoned vide order dated 9.10.2013 and, therefore, the learned Magistrate has passed a mechanical order without look