whether the appellant is indeed conversant with the day-to-day management of the Company, thereby justifying the issuance of summons to her. Section 141 of N.I. Act - Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.No-

 

Negotiable Instruments Act, 1881 — Ss. 138 & 141 — Vicarious liability of Director — Essential averment

For fastening liability on a Director, it is mandatory that the complaint contains a specific averment that the accused was “in charge of and responsible for the conduct of the business of the company” at the time of commission of offence; absence thereof is fatal. (Para 7)

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Director — Liability — Mere designation — Insufficient

Mere holding of office as Director does not automatically attract criminal liability under Section 141 NI Act; there is no deemed liability. (Para 7)

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Director — Signing of Board Resolution — Effect

Signing of a Board Resolution does not establish that the Director was involved in the day-to-day affairs of the company and is insufficient to attract vicarious liability. (Para 8)

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Complaint — Absence of specific role — Effect

Where the complaint is silent as to the role of the Director and does not attribute responsibility for conduct of business, prosecution is liable to be quashed. (Para 8)

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Summoning order — Validity — Mechanical issuance impermissible

Summoning of a Director without satisfaction of statutory requirements under Section 141 amounts to improper exercise of jurisdiction. (Paras 7–8)

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Criminal Procedure Code, 1973 — S.482 — Maintainability despite revision

Exercise of inherent jurisdiction under Section 482 Cr.P.C. is not barred merely because a revision petition under Section 397 Cr.P.C. has been filed or decided. (Paras 10–11)

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Criminal Procedure Code, 1973 — S.482 — Scope

Inherent powers are wide and can be exercised to prevent miscarriage of justice and abuse of process, including quashing of proceedings where basic ingredients of offence are absent. (Paras 10–11)

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RATIO DECIDENDI

A Director can be prosecuted under Sections 138/141 of the Negotiable Instruments Act only if the complaint contains specific averments that such Director was in charge of and responsible for the conduct of the business of the company at the relevant time; mere designation as Director or signing of Board resolutions does not satisfy the statutory requirement, and in absence of such foundational averments, continuation of criminal proceedings amounts to abuse of process and is liable to be quashed under Section 482 Cr.P.C.