Specific roles of directors must be established for vicarious liability under the Negotiable Instruments Act to be applicable.

O R D E R

Dated this the 25^th day of June, 2025 The petitioners are the accused in S.T No.3334 of 2019 pending on the files of the Judicial First Class Magistrate Court-I, Pala. The case originated from Annexure A complaint filed by the 2^nd respondent against the petitioners alleging commission of the offence punishable under Section 138 of the Negotiable Instruments Act .

2. As per the averments in the complaint, certain amounts were advanced to the accused by the complainant for purchasing the overseas rights of various malayalam feature films. The accused had agreed to repay the amounts along with proportionate share of profit to the complainant. Contrary to the promise, the accused failed to share the profits or repay the amount advanced. Finally, towards partial discharge of the legal liability, the 2^nd accused, with the consent and knowledge of the 3^rd accused, executed and delivered a cheque for Rupees 1 crore 55 lakhs. The cheque on presentation, was returned with the endorsement ‘funds insufficient’ and despite issuance of statutory notice, the liability was not cleared. 3. Adv. Saiby Jose Kidangoor appearing for the petitioners assailed the complaint and the further proceedings thereon by contending as follows;

The complaint is silent with respect to the specific role of accused Nos.2 and 3 in the affairs of the 1^st accused company. Except a vague averment that the 2^nd and 3^rd accused are in charge and responsible for the running and management of the company and are holding charge of its affairs, nothing further is stated in the complaint. Going by Section 141 of the Negotiable Instruments Act , persons who were in charge of and responsible to the company for the conduct of its business at the relevant point of time alone can be made liable and prosecuted for the offence under Section 138 of the . To buttress the argument, the learned Counsel read out with particular emphasis on the commas and submitted that the wordings “every person who, at the time the offence was committed”, is of particular importance as far as the instant case is concerned. Support for the argument is drawn from the decision of the Apex Court in Susela Padmavathy Amma Vs. Bharti Airtel Limited [ 2024 (3) SCR 647 ].

4. Adv. P.Maya, the learned Counsel appearing for the 2^nd respondent, submitted that in the reply notice sent by the 2^nd accused, he did not have any case that he was not in charge of and responsible for conduct of the affairs of the company. On the other hand, the contention was that the cheque in question was stolen from his possession. Learned Counsel further argued that specific averment is made in the complaint that accused Nos.2 and 3 were in charge of and responsible for the affairs of the company. Being so, the contention that the requirement of Section 141 is not satisfied, can only be rejected.

5. The focus of the argument being on the averment regarding the role of accused Nos.2 and 3 in the complaint, the relevant portion is extracted below for easy reference;

“1. The complainant is a production and distribution Company of Malayalam Feature films. Sri. Josemon Simon is the sole proprietor of M/s. Jairaj Motion Pictures. The company had produced 5 Malayalam Feature Films. The 1^st accused is a company registered under the provisions of Companies Act, 1956 having its registered office at Cochin, involved in production and distribution of cinemas in India and abroad, incorporated in the year 2016. The 2^nd and 3^rd accused are in charge and responsible for the running and management of the 1^st accused company and the 2^nd and 3^rd accused are holding charge of the affairs of the 1^st accused. The 2^nd accused herein is the Managing Director of the Company. The complainant and accused had close