High Court

Legal Reasoning

( 1 ) cri wp 394.22 IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCRIMINAL WRIT PETITION NO. 394 OF 2022withCRIMINAL WRIT PETITION NO. 395 OF 2022withCRIMINAL WRIT PETITION NO. 396 OF 2022withCRIMINAL WRIT PETITION NO. 663 OF 2023withCRIMINAL WRIT PETITION NO. 664 OF 2023withCRIMINAL WRIT PETITION NO. 665 OF 2023S. Saraswathi Sankar,Age- 55 years, Occu. Business &Director of Shalini Television Network Pvt. Ltd.,Office No.37, T.N.H.B. Complex,Luz Golden Enclave No.180,Luz Church Road, Mylapore,Chennai. (Tamil Nadu)....PETITIONERV/s.Sofiya Entertainment Pvt. Ltd.,Through its Director and Owner,Mr. Munir Kadar Shaikh,Age: 53 years, Occ. Business,Administrative Office, Behind Kute Hospital,Near Over Bridge, Shrirampur,District : Ahmednagar.Registered Office: Safa Motors,Safa Complex, Opp. Bhagwan Homeopathic College, N-6,Cidco, Aurangabad. ...RESPONDENT.....Mr. S.V. Dixit a/w. N.B. Sangle, Advocate for the PetitionerMr. Rahul A. Tambe, Advocate for the Respondent..… ( 2 ) cri wp 394.22 CORAM : Y.G. KHOBRAGADE, J.RESERVED ON :13.11.2024 PRONOUNCED ON :22.11.2024JUDGMENT:-1.Rule. Rule made returnable forthwith. Heard finally with consentof both the sides.2.In all these petitions, the Petitioner/accused is a Director of ShaliniTelevision Network Pvt. Ltd., who has challenged the orders dated 14.08.2018,01.08.2018, 07.06.2018 and 11.07.2022 passed in SCC Nos. 598/2018,279/2018, 278/2018, 626/2022, 625/2022 and 624/2022 by the learnedJMFC, Court No.1, Shrirampur, thereby issued process against thePetitioner/accused for the offence punishable under Section 138 of theNegotiable Instruments Act, 1881 is challenged. The Petitioner further prayedfor quashment of proceedings initiated against him for the offence punishableunder Section 138 of the N.I. Act. 3.After hearing both the sides a common question has arisen is thatwhether the complaints under Section 138 of the N.I. Act, are maintainable asagainst the Director of the company without impleading the company as anaccused, when the cheques involved in the complaints have been issued fordischarging the legal liability of the company. ( 3 ) cri wp 394.22 4.The Respondent in all these petitions is the original complainantand the present Petitioner is the original accused in complaint bearing SCC Nos.598/2018, 279/2018, 278/2018, 626/2022, 625/2022 and 624/2022. For thesake of brevity, I would like to refer the parties in these petitions in theiroriginal capacity as complainant and accused. It is not out of record to mentionhere that the Respondent/ complainant company filed these separatecomplaints alleging that on 09.12.2015 an agreement was executed with M/s.Shalini Television Network Pvt. Ltd. for advertising. As per terms andconditions of the said agreement, it was obligatory on part of the accused toarrange an amount of Rs.10,00,000/- against the pending dues ofRs.78,00,000/- and fixed monthly rent as prescribed in the agreement.Therefore, the accused issued account payee cheque nos. 603282, 603283,603284, 603253, 603252 and 603251 dated 10.11.2017, 10.12.2017,10.01.2018, 10.10.2017 and 10.08.2017 for an amount of Rs.10,00,000/- eachdrawn on State Bank of India, LUZ Branch, Mylapore, Chennai from A/cNo.64111620490 to discharge the legal liability. The said cheques weredeposited by the complainant company with its Banker ICICI Bank, ShrirampurBranch, on different dates, however, said cheques were dishonored due to‘insufficient funds’. The complainant received intimation about dishonor ofcheque nos.603282, 603283, 603284, 603253, 603252 and 603251 through hisbanker on 04.01.2018, 15.03.2018 and 06.11.2017. Thereafter, on ( 4 ) cri wp 394.22 22.01.2018, 31.03.2018 and 27.11.2017, the complainant company issuedmandatory notices under Section 138 of the N.I. Act in respect of each of thecheques and called upon the accused (Petitioner) to pay the amount of cheque.The said mandatory notices were duly served upon the accused (Petitioner) on29.01.2018, 07.04.2018 and 04.12.2017 respectively but the Petitioner failedto comply with the notices within the statutory period, therefore theRespondent/complainant filed six complaints and prayed for appropriatepunishment against the accused for the offence punishable under Section 138of the N.I. Act. 5.On 14.08.2018, 01.08.2018, 07.06.2018 and 11.07.2022 thelearned JMFC, Shrirampur passed an order below Exh.1 in SCC SCC Nos.598/2018, 279/2018, 278/2018, 626/2022, 625/2022 and 624/2022 andissued process against the accused (Petitioner) for the offence punishable underSection 138 of the N.I. Act. Being aggrieved by said orders, the Petitioner hasfiled these petitions praying for quashing and setting aside the proceedingsunder Section 138 of the N.I. Act.6.The learned counsel appearing for the Petitioner canvassed invehemence that the Petitioner/accused is a Director of Shalini TelevisionNetwork Pvt. Ltd. On 09.12.2015, the Respondent/complainant companythrough it’s signatory and Shalini Television Network Pvt. Ltd., through it’s ( 5 ) cri wp 394.22 signatory entered into an agreement for broadcasting of some contents oncertain terms and conditions. As per the terms and conditions of the contract,Rs.2,65,000/- per month was payable by the advertiser (Shalini TelevisionNetwork Pvt. Ltd) to the Respondent/complainant along with cost of teleportand linking per month. It was further agreed by the Respondent/complainantthat it would apply for change of name of the news channel from ‘MK News’ to‘Shalini Plus’ after security deposit is paid. The rental and teleport rental wasto be paid to the Respondent/complainant after the date of launching ofchannel. The Complainant Company/advertiser agreed to launch the channelin the name of Shalini Plus after such changes are approved by the Ministry ofInformation and Broadcasting. Both companies agreed to resolve the disputethrough the Arbitrator, in case of any dispute arise in future. The saidagreement was for a period of three years w.e.f. 09.12.2015.7.It has been contended that as per Clause-III of the agreement dated09.12.2015, the advertiser company Shalini Television Network Pvt. Ltd.,agreed to pay monthly rental and teleport rental charges after changingchannel’s name to Shalini Plus, however, without changing the name of thechannel, the Respondent/complainant insisted for payment of rental amountand teleport rental from January-2016. Therefore, the advertiser company paidsecurity amount of Rs.7,95,000/- in addition to teleport deposit amount ofRs.5,25,000/- in the month of December-2015 and January-2016. However, ( 6 ) cri wp 394.22 even after several requests made by the advertiser company the Respondent/complainant company has not changed the name of the channel and causeddamage to the reputation and brand name of the advertiser company. Further,though the name of the channel was not changed as per terms of theagreement but the Respondent/complainant insisted for issuance of post datedcheques. Therefore, in order to maintain cordial relationship, on 03.11.2017,the Advertiser company Shalini Television Network Pvt., Ltd., issued post datedcheques bearing nos.603282, 603283, 603284, 603253, 603252 and 603251dated 10.11.2017, 10.12.2017, 10.01.2018, 10.10.2017 and 10.08.2017 incompliance of condition no.3 of the Agreement dated 09.12.2015.8.The learned counsel appearing for the Petitioner canvassed that on09.12.2015 an agreement was executed between the Respondent/ complainantcompany and Shalini Television Network Pvt. Ltd., for advertising the contents,however, the Respondent/complainant committed breach of terms of contractdated 09.12.2015. The advertiser company issued a notice dated 17.12.2021for arbitration as per clause-V of the agreement but the dispute was notrefferred to the Arbitrator, however, the complainant company issued amandatory notice u/s 138 of the NI Act against the Petitioner, who is Directorof Shalini Television Network Pvt. Ltd. It is further canvassed that the presentPetitioner is the Director of the company and subject matter of complaintscheques are issued from the account of the company for discharging the legal ( 7 ) cri wp 394.22 liabilities, therefore, without impleading the company as an accused for theoffence punishable under Section 138 of the N.I. Act, the complaint as againstthe Director of the company is not maintainable.9.The learned counsel appearing for the Petitioner further canvassedthat the business agreement was entered between the Respondent/complainant company and Shalini Television Network Pvt. Ltd. The chequeswhich are subject matter of the complaints are issued from the account of thecompany. Therefore, without impleading the company as an accused on whoseaccount the cheques have been issued, the complaints u/s 138 of NI Act are notmaintainable and said complaints as against the Petitioner/Director are notmaintainable. However, the Respondent/complainant company only impleadedthe Director of the company as an accused though the Director has no personalliability of the company. Therefore, the complaints against the Director are notmaintainable, hence, prayed for quashing and setting aside the complaints aswell as prayed for order of issuance of process.10.To buttress these submissions the learned counsel appearing forthe Petitioner placed reliance on the case of Pawan Kumar Goel V/s. State ofU.P. and Anr.; 2022 SCC OnLine 1598, Himanshu V/s. B. Shivamurthy and Anr.;(2019) 3 SCC 797, Aneeta Hada V/s. Godfather Travels and Tours Pvt. Ltd.; ( 8 ) cri wp 394.22 (2015) 5 SCC 661 and Ramrajsingh V/s. State of M.P. and Anr.; AIR 2009 SC(Supp) 1726.11.Per contra, Mr. Tambe the learned counsel appearing for theRespondent/complainant company canvassed in vehemence that the Petitionerhas not disputed about entering into an agreement dated 09.12.2015 betweenthe complainant company and M/s. Shalini Television Network Pvt. Ltd. Thesaid company was represented through the present Petitioner- S. SaraswathiSankar. On 24.12.2015, the Respondent/company applied for change of namealong with all necessary documents. The Petitioner being a Director of ShaliniTelevision Network Pvt. Ltd., started using the services w.e.f. 01.06.2016.Therefore, the Respondent/company demanded rental amount and forpayment of the same the Petitioner/accused issued the cheques. ThePetitioner / accused has admitted vide e-mail about user of services w.e.f.01.01.2016 but the payment as promised was not paid. Therefore, theRespondent/company deposited said cheques on assurance of the Petitionerabout honouring of cheques. It is further argued that the Petitioner/accusedhad agreed that he is the Authority and Director of Shalini Television NetworkPvt. Ltd. and accepted all the responsibility of payments described in theagreement and to clear all the dues. So also, as per the agreement thePetitioner agreed about use of services w.e.f. 09.12.2015 to 27.12.2017.Therefore, defence taken by the Petitioner about not using the services from ( 9 ) cri wp 394.22 09.12.2015 is not justifiable. Further vide communication dated 27.12.2017,the Petitioner admitted about issuance of five cheques which have beendishonored and the Petitioner took all the responsibility being a Director of thecompany about clearance of all dues within one month from the date of theagreement. Therefore, the Respondent/company complainant initiated theproceedings under Section 138 of the N.I. Act for dishonor of cheques. Though,the Respondent/complainant issued the mandatory notices under Section 138of the N.I. Act but the Petitioner/accused failed to reply and not complied withthe mandatory notices within the stipulated period. Therefore, thePetitioner/accused has committed offence punishable under Section 138 of theN.I. Act. Therefore, though the drawer-company not been impleaded as anaccused still the complaints as against the authorized signatory of the cheque-drawee company is maintainable and the Director can be prosecuted for theoffence punishable under Section 138 of the N.I. Act.12.In support of these submissions Mr. Tambe, the learned counselappearing for the complainant relied on the following case laws:i)U.P. Pollution Control Board V/s. Messrs Modi Distillery & Ors.; (1987) 3SCC 684.ii)S.R. Sukumar V/s. S. Sunaad Raghuram; (2015) 9 SCC 609iii)S.P. Mani & Mohan Dairy V/s. Dr. Snehalatha Elangovan; (2023) 10 SCC685. ( 10 ) cri wp 394.22 iv)Managing Director, Bhuleshwar Sugar Works Ltd., Purandar & Anr. V/s.N.R. Fabricators and Erectors, Shri. N.r. Satpute (Director) & Anr (Criminal W.P.No.1418/2022) order dated 09.01.2023.v)Anil Kumar Singhal V/s. State of Maharashtra & Ors.; 2023 (1) Mh.L.J.555.13.It is not in dispute that in all these matters, theRespondent/complainant company instituted complaints bearing SCC Nos.598/2018, 279/2018, 278/2018, 626/2022, 625/2022 and 624/2022 for theoffence punishable under Section 138 of the N.I. Act on account of dishonor ofcheques, the details of which is as under:Cri. W.P. Nos.SCC Nos.Cheque Nos.Date of chequeDate ofdishonor394/2022598/201860328210.11.201704.01.2018395/2022279/201860328310.12.201704.01.2018396/2022278/201860328410.01.201815.03.2018663/2023626/202260325310.10.201706.11.2017664/2023625/202260325210.08.201706.11.2017665/2023624/202260325110.08.201706.11.201714.Prima facie, all above cheques are issued for discharge of legalliabilities from the account of Shalini Television Network Pvt. Ltd., as per termsand conditions of agreement executed between the Respondent/complainantcompany and Shalini Television Network Private Limited. No doubt, thepresent Petitioner/accused is a Director of Shalini Television Network Pvt. Ltd.,and authorized signatory of Shalini Television Network Pvt. Ltd. Therefore, ( 11 ) cri wp 394.22 merely being the authorized signatory i.e. the Petitioner/accused signed allthese cheques on behalf of the company. 15.In Pawan Kumar Goel cited (supra), the Hon’ble Apex Courtconsidered two issues; 1) Whether a director of a company would be liable forprosecution under Section 138 of NI Act without the company being arraignedas an accused and 2) Whether a complaint under Section 138 of NI Act wouldbe liable to be proceeded against the director of the company without theirbeing any averments in the complaint that the director arrayed as an accusedwas in charge of and responsible for the conduct and business of the company.The Hon’ble Supreme Court considered the scope of Section 138 and 141 of theN.I. Act and observed in para nos.25 to 29 as under:“25. This Court has been firm with the stand that if the complainant fails tomake specific averments against the company in the complaint for the commissionof an offence under Section 138 of NI Act, the same cannot be rectified by takingrecourse to general principles of criminal jurisprudence. Needless to say, theprovisions of Section 141 impose vicarious liability by deeming fiction which pre-supposes and requires the commission of the offence by the company or firm.Therefore, unless the company or firm has committed the offence as a principalaccused, the persons mentioned in sub-Section (1) and (2) would not be liable tobe convicted on the basis of the principles of vicarious liablity.26. Reference in this connection may also be made to another judgment of thetwo-Judge Bench of this Court in Himanshu Vs. B. Shivamurthy and Another(Supra), the facts wherein have a stark similarity to the facts of the present case,considering the issue where the complaint was lodged only against the directorwithout arraigning the company as an accused and whether the company could besubsequently arraigned as an accused, it was observed as under:-“11. In the present case, the record before the Court indicates that the cheque wasdrawn by the appellant for Lakshmi Cement and Ceramics Industries Ltd., as itsDirector. A notice of demand was served only on the appellant. The complaint ( 12 ) cri wp 394.22 was lodged only against the appellant without arraigning the company as anaccused.12. The provisions of Section 141postulate that if the person committing anoffence under Section 138 is a company, 4 (2018) 13 SC 663 every person, whoat the time when the offence was committed was in charge of or was responsibleto the company for the conduct of the business of the company as well as thecompany, shall be deemed to be guilty of the offence and shall be liable to beproceeded against and punished.13. In the absence of the company being arraigned as an accused, a complaintagainst the appellant was therefore not maintainable. The appellant had signedthe cheque as a Director of the company and for and on its behalf. Moreover, inthe absence of a notice of demand being served on the company and withoutcompliance with the proviso to Section 138, the High Court was in error inholding that the company could now be arraigned as an accused.”27. This issue stands concluded by a decision of three-Judge Bench of thisCourt in the case of Aneeta Hada Vs. Godfather Travels & Tours (P) Ltd. (Supra),wherein it has been held that for maintaining the prosecution under Section 141ofNI Act, arraigning of the company as an accused is imperative and non-impleadment of the company would be fatal for the complaint. It may be relevantto extract the following from the said judgment:-“58. Applying the doctrine of strict construction, we are of the consideredopinion that commission of offence by the company is an express conditionprecedent to attract the vicarious liability of others. Thus, the words “as well asthe company” appearing in the Section make it absolutely unmistakably clear thatwhen the company can be prosecuted, then only the persons mentioned in theother categories could be vicariously liable for the offence subject to theaverments in the petition and proof thereof. One cannot be oblivious of the factthat the company is a juristic person and it has its own respectability. If a findingis recorded against it, it would create a concavity in its reputation. There can besituations when the corporate reputation is affected when a director is indicted.59. In view of our aforesaid analysis, we arrive at the irresistible conclusion thatfor maintaining the prosecution under Section 141 of the Act, arraigning of acompany as an accused is imperative. The other categories of offenders can onlybe brought in the dragnet on the touchstone of vicarious liability as the same hasbeen stipulated in the provision itself.”28.The observations made in the aforesaid judgment is also a completeanswer to the arguments advanced by learned counsel for the appellant that in the ( 13 ) cri wp 394.22 absence of any prohibition under the NI Act, the amendment in the complaint ispermissible and the impleadment of an additional accused subsequent to filing ofthe complaint, would not be barred. At this juncture, we may also refer to thefollowing observations made in the case of N. Harihara Krishnan Vs. J. Thomas(Supra) :-“26. The scheme of the prosecution in punishing under Section 138 of the Act isdifferent from the scheme of Cr.PC. Section 138 creates an offence andprescribes punishment. No procedure for the investigation of the offence iscontemplated. The prosecution is initiated on the basis of a written complaintmade by the payee of a cheque. Obviously such complaints must contain thefactual allegations constituting each of the ingredients of the offence underSection 138. Those ingredients are: (1) that a person drew a cheque on an accountmaintained by him with the banker; (2) that such cheque when presented to thebank is returned by the bank unpaid; (3) that such a cheque was presented to thebank within a period of six months from the date it was drawn or within theperiod of its validity whichever is earlier; (4) that the payee demanded in writingfrom the drawer of the cheque the payment of the amount of money due underthe cheque to payee; and (5) such a notice of payment is made within a period of30 days from the date of the receipt of the information by the payee from thebank regarding the return of the cheque as unpaid. It is obvious from the schemeof Section 138 that each one of the ingredients flows from a document whichevidences the existence of such an ingredient. The only other ingredient which isrequired to be proved to establish the commission of an offence under Section138 is that in spite of the demand notice referred to above, the drawer of thecheque failed to make the payment within a period of 15 days from the date ofthe receipt of the demand. A fact which the complainant can only assert but notprove, the burden would essentially be on the drawer of the cheque to prove thathe had in fact made the payment pursuant to the demand.27. By the nature of the offence under Section 138 of the Act, the first ingredientconstituting the offence is the fact that a person drew a cheque. The identity ofthe drawer of the cheque is necessarily required to be known to the complainant(payee) and needs investigation and would not normally be in dispute unless theperson who is alleged to have drawn a cheque disputes that very fact. The otherfacts required to be proved for securing the punishment of the person who drew acheque that eventually got dishonoured is that the payee of the cheque did in factcomply with each one of the steps contemplated under Section 138 of the Actbefore initiating prosecution. Because it is already held by this Court that failureto comply with any one of the steps contemplated under Section 138 would notprovide “cause of action for prosecution”. Therefore, in the context of aprosecution under Section 138, the concept of taking cognizance of the offence ( 14 ) cri wp 394.22 but not the offender is not appropriate. Unless the complaint contains all thenecessary factual allegations constituting each of the ingredients of the offenceunder Section 138, the Court cannot take cognizance of the offence. Disclosureof the name of the person drawing the cheque is one of the factual allegationswhich a complaint is required to contain. Otherwise in the absence of anyauthority of law to investigate the offence under Section 138, there would be noperson against whom a court can proceed. There cannot be a prosecution withoutan accused. The offence under Section 138 is person specific. Therefore,Parliament declared under Section 142 that the provisions dealing with takingcognizance contained in the CrPC should give way to the procedure prescribedunder Section 142. Hence the opening of non obstante clause under Section 142.It must also be remembered that Section 142 does not either contemplate a reportto the police or authorise the Court taking cognizance to direct the police toinvestigate into the complaint.28. The question whether the respondent had sufficient cause for not filing thecomplaint against Dakshin within the period prescribed under the Act is notexamined by either of the courts below. As rightly pointed out, the application,which is the subject-matter of the instant appeal purportedly filed invokingSection 319 CrPC, is only a device by which the respondent seeks to initiateprosecution against Dakshin beyond the period of limitation stipulated under theAct.”29.In view of the above, arguments advanced by learned counsel for theappellant that an additional accused can be impleaded subsequent to the filing ofthe complaint merits no consideration, once the limitation prescribed for takingcognizance of the offence under Section 142 of NI Act has expired. Moreparticularly, in view of the fact that neither any effort was made by the petitionerat any stage of the proceedings to arraign the company as an accused nor any suchcircumstances or reason has been pointed out to enable the Court to exercise thepower conferred by proviso to Section 142, to condone the delay for not makingthe complaint within the prescribed period of limitation.”16.In cited case the Hon’ble Supreme Court also considered the caseof S.M.S. Pharmaceuticals Ltd. V/s. Neeta Bhalla (2005) 8 SCC 89, wherein theprovisions of Section 141 of the N.I. Act were considered wherein the words“who, at the time the offence was committed, was in charge of, and was ( 15 ) cri wp 394.22 responsible to the company for the conduct of the business of the company, aswell as the company, shall be deemed to be guilty of the offences etc.” andobserved in para 33 and para 37 as under:“33......“While analysing Section 141 of the Act, it will be seen that it operatesin cases where an offence under Section 138 is committed by a company. Thekey words which occur in the Section are "every person". These are generalwords and take every person connected with a company within their sweep.Therefore, these words have been rightly qualified by use of the words :“who, at the time the offence was committed, was in charge of, and wasresponsible to the company for the conduct of the business of the company, aswell as the company, shall be deemed to be guilty of the offence etc."What is required is that the persons who are sought to be madecriminally liable under Section 141 should be at the time the offence wascommitted, in charge of and responsible to the company for the conduct of thebusiness of the company. Every person connected with the company shall notfall within the ambit of the provision. It is only those persons who were incharge of and responsible for conduct of business of the company at the timeof commission of an offence, who will be liable for criminal action. It followsfrom this that if a director of a Company who was not in charge of and wasnot responsible for the conduct of the business of the company at the relevanttime, will not be liable under the provision. The liability arises from being incharge of and responsible for conduct of business of the company at therelevant time when the offence was committed and not on the basis of merelyholding a designation or office in a company. Conversely, a person not holdingany office or designation in a Company may be liable if he satisfies the mainrequirement of being in charge of and responsible for conduct of business of aCompany at the relevant time. Liability depends on the role one plays in theaffairs of a Company and not on designation or status. If being a Director orManager or Secretary was enough to cast criminal liability, the Section wouldhave said so. Instead of "every person" the section would have said "everyDirector, Manager or Secretary in a Company is liable"..etc. The legislature isaware that it is a case of criminal liability which means serious consequencesso far as the person sought to be made liable is concerned. Therefore, onlypersons who can be said to be connected with the commission of a crime atthe relevant time have been subjected to action. ( 16 ) cri wp 394.22 11. A reference to sub-section (2) of Section 141 fortifies the above reasoningbecause sub-section (2) envisages direct involvement of any Director,Manager, Secretary or other officer of a company in commission of anoffence. This section operates when in a trial it is proved that the offence hasbeen committed with the consent or connivance or is attributable to neglect onthe part of any of the holders of these offices in a company. In such a case,such persons are to be held liable. Provision has been made for Directors,Managers, Secretaries and other officers of a company to cover them in casesof their proved involvement.12. The conclusion is inevitable that the liability arises on account of conduct ,act or omission on the part of a person and not merely on account of holdingan office or a position in a company. Therefore, in order to bring a case withinSection 141 of the Act the complaint must disclose the necessary facts whichmake a person liable.”............37.The Bench answered the questions posed in the reference as under :-“19. (a) It is necessary to specifically aver in a complaint under Section 141that at the time the offence was committed, the person accused was in chargeof, and responsible for the conduct of business of the company. This avermentis an essential requirement of Section 141and has to be made in a complaint.Without this averment being made in a complaint, the requirements of Section141 cannot be said to be satisfied. Section 141 (b) The answer to question posed in sub-para (b) has to be in negative.Merely being a director of a company is not sufficient to make the personliable undet Section 141of the Act. A director in a company cannot be deemedto be in charge of and responsible to the company for conduct of its business.The requirement of Section 141 is that the person sought to be made liableshould be in charge of and responsible for the conduct of the business of thecompany at the relevant time. This has to be averred as a fact as there is nodeemed liability of a director in such cases. (c) The answer to question (c ) has to be in affirmative. The question notesthat the Managing Director or Joint Managing Director would be admittedly incharge of the company and responsible to the company for conduct of itsbusiness. When that is so, holders of such positions in a company becomeliable under Section 141 of the Act. By virtue of the office they hold asManaging Director or Joint Managing Director, these persons are in charge of ( 17 ) cri wp 394.22 and responsible for the conduct of business of the company. Therefore, theyget covered under Section 141. So far as signatory of a cheque which isdishonoured is concerned, he is clearly responsible for the incriminating actand will be covered under sub-section (2) of Section 141.” 17.In the case of Managing Director of M/s Castrol India Ltd.; 2018ALL M. R. Cri. 465 (SC), it has been held that to determine vicarious liability ofOfficer of company, clear and categorical statement that he was In charge of theconduct of business of company in respect of which an offence is alleged tohave been committed, is required to be made. If no such statement or avermentis made in the complaint that the M.D. was responsible for conduct of businessof the company or for commission of any act on the basis of which an offence isalleged to have been committed, the proceeding against the M.D. of company isliable to be quashed.18.In the case in hand, the alleged cheques have been issued from theaccount of the company for discharging legal liability of the company inpursuance of the agreement executed between the complainant company andShalini Television Network Pvt. Ltd. but those cheques were dishonored.Therefore, Shalini Television Network Pvt. Ltd. allegedly committed the offenceu/s 138 of the N. I. Act and merely, the present Petitioner signed those chequesbeing the authorized signatory he cannot be solely prosecuted withoutimpleading the cheque drawee company. Therefore, the complaints as against ( 18 ) cri wp 394.22 the Petitioner/accused are not maintainable and continuation of proceedings asagainst the Petitioner will amount to abuse of process of law.19. In case of Himanshu cited (supra) the Hon’ble Supreme Court heldthat the provisions of Section 141 postulate that if the person committing anoffence under Section 138 is a company, every person, who at the time whenthe offence was committed was in charge of or was responsible to the companyfor the conduct of the business of the company as well as the company, shall bedeemed to be guilty of the offence and shall be liable to be proceeded againstand punished. It is further held that in absence of the company beingarraigned as an accused, a complaint against the appellant was therefore notmaintainable. The appellant had signed the cheque as a Director of thecompany and for and on its behalf. Moreover, in the absence of a notice ofdemand being served on the company and without compliance with the provisoto Section 138, the High Court was in error in holding that the company couldnow be arraigned as an accused.20.Similarly, in the case in hand, it prima facie appears that thepresent Petitioner is a Director of cheque drawee company and theRespondent/complainant has not issued mandatory notices under Section 138of N.I. Act calling upon the company for compliance of mandatory notice u/s138. So also, the company has not been impleaded as an accused to the ( 19 ) cri wp 394.22 proceeding under Section 138. Therefore, in my considered view, thecomplaints as against the sole Petitioner/Director without impleading thecompany are not maintainable.21.In view of the above, all these Writ Petitions are hereby allowed.All the complaints described herein-above as against the present Petitioner arehereby quashed and set aside. Resultantly, the orders of issuance of processpassed by the learned JMFC, Shrirampur in all these complaints are alsoquashed and set aside. Parties to bear their own costs.22.Rule is made absolute in the above terms. [Y.G. KHOBRAGADE, J.]mub