Sinha, J. -- 1. Leave granted in SLPs.

2. Two cheques dated 23.6.2001 and 30.6.2001 for a sum of Rs. 1,24,406/- each were issued in favour of the respondent allegedly on behalf of a company known as Karnataka News Net (Bangalore) Ltd. The appellants herein were not directors of the said company at the material time. Two complaint petitions were filed by the respondent herein before the Addl. Chief Metropolitan Magistrate, Bahgalore wherein appellants were described as accused Nos. 6 and 8. In the said complaint petitions, it was categorically stated that the company which had been dealing with imparting of computer education in rural areas represented by its Managing Director Chairman, Vice-Chairman and other Directors borrowed a sum of Rs. 2,25,000/- from the respondent on an interest of 24% per annum. Towards payment of the said loan, the accused had issued two cheques on 23.6.2001 and 30.6.2001 for a sum of Rs. 1,24,406/- each which upon being presented were dishonoured as the company did not have sufficient fund. In the complaint petition, it was averred:

"(7) The complainant submits that the accused persons have failed to clear the liability. The accused being company and all the directors are responsible for the clearance of liability under section 141 of the N.I. Act and the acts and deeds of the accused persons is punishable under section 138 of N.I. Act."

3. In support of the said complaint petition, one Ravidraradya, son of the complainant filed a sworn affidavit stating:

"....The accused No. 2 is the M.D. and others are Chairman and partners. The accused-company towards repayment of the loan, issued a cheque in favour of the complainant. The M.D. signed and issued the cheque dated 23.6.2001 for Rs.1,24,406/- on the account maintained by the company. On presentation, the same was returned on 30.6.2001 as insufficient funds. Notice dated 12.7.2001 was issued through advocate to the accused was served on 13.7.2001. The case was filed on 27.8.2001."

4. Processes were directed to be issued on the said statement for alleged commission of an offence under section 138 of the Negotiable Instruments Act.

5. Appellants herein filed an application under section 482 of the Code of Criminal Procedure praying for quashing of the processes issued against them in the said proceedings.

6. The High Court by reason of the impugned judgment dismissed the said application stating:

"(3) The material on record prima facie disclose that these petitioners were directors on the date of the offence i.e: on 30.7.2003. The question as to whether these petitioners were involved in day to day affairs of the business of the company is to be decided based on the material on record collected during the course of trial."

7. Section 138 of the Negotiable Instruments Act provides that where a cheque drawn by a person is returned by the bank unpaid on the grounds specified therein, the person who had drawn the said cheque shall be deemed to have committed an offence thereunder. Section 139 provides for a presumption in favour of a holder of a Negotiable Instrument. Section 141 of the Act provides for offences by a company. Sub-section (1) of section 141 reads 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 is nominated a a Director of a company by virtue of his holding any office or employment in the Centr