SMT. RADHA SHRINIVAS DESHPANDE, AGE: 47 YEARS, OCC: PRINCIPAL GANIT LOK v. THE KARNATAKA FINANCIAL SERVICES LTD

2 . MR. SADASHIVARAO, CHAIRMAN OF KARNATAKA FINANCIAL SERVICE LTD., BENGALURU - 560 001. …RESPONDENTS (BY SRI. SRI NARAYAN V. YAJI, ADV. AND SRI. VISHWANATH K. BHAT, ADV. FOR R2 R1 SERVED) THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C. *** SEEKING TO SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL PASSED BY THE I-ADDL. CIVIL JUDGE (JR.DN.) IN C.C.NO.605/2009, DATED 13.04.2011. IN CRIMINAL APPEAL NO. 2760 OF 2011 BETWEEN: RAJESHWARI D/O. GOPAL HARAPANAHALLI, R/BY HER POA HOLDER SRI. GOPAL S/O. DATTATREYA HARAPANAHALLI, AGE: 74 YEARS, OCC: PENSIONER, H.NO: 164, TEJASWINI NAGAR, CO-OPERATIVE SOCIETY, TEJASWI NAGAR, DHARWAD. (BY SRI. SRIKANT T. PATIL, ADV.) AND: …APPELLANT - 4 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011

1. THE KARNATAKA FINANCIAL SERVICES LTD., NO: 13, KRISHNA REDDY LAYOUT, DOMLUR, BENGALURU-560 001.

2. MR. SADASHIV RAO, CHAIRMAN OF KARNATAKA FINANCIAL SERVICES LTD., AGE: 74 YEARS, R/O: NO: 872/D, HAL 111 STAGE, 80 FEET ROAD, BENGALURU - 560075. (BY SRI. SRI NARAYAN V. YAJI, ADV. AND SRI. VISHWANATH K. BHAT, ADV. FOR R2 R1 SERVED) …RESPONDENTS *** THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL PASSED BY THE I-ADDNL. CIVIL JUDGE (JR.DN.) & J.M.F.C. DHARWAD IN C.C.NO.601/2009, DATED 13.04.2011. IN CRIMINAL APPEAL NO. 2761 OF 2011 BETWEEN:

1. SRI. GOPAL S/O. DATTATREY HARAPANAHALLI, SINCE DECEASED BY LR'S. (a) SMT. JYOTI W/O. VENKATESH INAMDAR AGE-48 YEARS, OCC- TEACHER, R/O. B.E.M.L. NAGAR, K.G.F., KOLAR, KOLAR DIST-563122. (b) SMT. RAJESHWARI W/O. CHIDAMBAR RAO DESAI AGE- 37 YEARS, OCC- ENGINEER, R/O. BANASHANKARI NAGAR, STAGE III, BENGALURU-560050 (c) SRI. PUSHPHAS S/O. LATE GOPAL HARAPANAHALLI AGE- 34 YEARS, OCC- CHEMICAL ENGINEER, R/O. ERNAKULAM, KERALA, INDIA-682011 …APPELLANTS - 5 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 (BY SRI. SRIKANT T. PATIL, ADV.) AND:

1. THE KARNATAKA FINANCIAL SERVICES LTD., NO: 13, KRISHNA REDDY LAYOUT, DOMLUR, BENGALURU-560 001.

2. MR. SADASHIVARAO, CHAIRMAN OF KARNATAKA FINANCIAL SERVICE LTD., BENGALURU - 560001. …RESPONDENTS (BY SRI. SRI NARAYAN V. YAJI, ADV. AND SRI. VISHWANATH K. BHAT, ADV. FOR R2 R1 SERVED) *** THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL PASSED BY THE I-ADDNL. CIVIL JUDGE (JR.DN.) J.M.F.C. DHARWAD IN C.C.NO.605/2009, DATED 13.04.2011. IN CRIMINAL APPEAL NO. 2762 OF 2011 BETWEEN: RAJESHWARI D/O. GOPAL HARAPANAHALLI, R/BY HER POA HOLDER SRI. GOPAL S/O. DATTATREYA HARAPANAHALLI, AGE: 74 YEARS, OCC: PENSIONER, H.NO: 164, TEJASWINI NAGAR, CO-OPERATIVE SOCIETY, TEJASWI NAGAR, DHARWAD. (BY SRI. SRIKANT T. PATIL, ADV.) AND:

1. THE KARNATAKA FINANCIAL SERVICES LTD., …APPELLANT - 6 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 NO: 13, KRISHNA REDDY LAYOUT, DOMLUR, BENGALURU-560 001.

2. MR. SADASHIV RAO, CHAIRMAN OF KARNATAKA FINANCIAL SERVICES LTD., AGE: 74 YEARS, R/O: NO: 872/D, HAL 111 STAGE, 80 FEET ROAD, BENGALURU - 560075. (BY SRI. SRI NARAYAN V. YAJI, ADV. AND SRI. VISHWANATH K. BHAT, ADV. FOR R2 R1 SERVED) …RESPONDENTS *** THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL PASSED BY THE I-ADDNL. CIVIL JUDGE (JR.DN.) J.M.F.C. DHARWAD IN C.C.NO.603/2009, DATED 13.04.2011. IN CRIMINAL APPEAL NO. 2763 OF 2011 BETWEEN:

1. SRI. GOPAL S/O. DATTATREY HARAPANAHALLI, SINCE DECEASED BY LR'S. (a) SMT. JYOTI W/O. VENKATESH INAMDAR AGE-48 YEARS, OCC- TEACHER, R/O. B.E.M.L. NAGAR, K.G.F., KOLAR, KOLAR DIST-563122. (b) SMT. RAJESHWARI W/O. CHIDAMBAR RAO DESAI AGE- 37 YEARS, OCC- ENGINEER, R/O. BANASHANKARI NAGAR, STAGE III, BENGALURU-560050 (c) SRI. PUSHPHAS S/O. LATE GOPAL HARAPANAHALLI AGE- 34 YEARS, OCC- CHEMICAL ENGINEER, - 7 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 R/O. ERNAKULAM, KERALA, INDIA-682011 …APPELLANTS (BY SRI. SRIKANT T. PATIL, ADV.) AND:

1. THE KARNATAKA FINANCIAL SERVICES LTD., NO: 13, KRISHNA REDDY LAYOUT, DOMLUR, BENGALURU-560 001.

2. MR. SADASHIVARAO, CHAIRMAN OF KARNATAKA FINANCIAL SERVICE LTD., BENGALURU - 560001. …RESPONDENTS (BY SRI. SRI NARAYAN V. YAJI, ADV. AND SRI. VISHWANATH K. BHAT, ADV. FOR R2 R1 SERVED) *** THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL PASSED BY THE I-ADDNL. CIVIL JUDGE (JR.DN.) J.M.F.C. DHARWAD IN C.C.NO.605/2009, DATED 13.04.2011. IN CRIMINAL APPEAL NO. 2764 OF 2011 BETWEEN:

1. SRI. GOPAL S/O. DATTATREY HARAPANAHALLI, SINCE DECEASED BY LR'S. (a) SMT. JYOTI W/O. VENKATESH INAMDAR AGE-48 YEARS, OCC- TEACHER, R/O. B.E.M.L. NAGAR, K.G.F., KOLAR, KOLAR DIST-563122. - 8 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 (b) SMT. RAJESHWARI W/O. CHIDAMBAR RAO DESAI AGE- 37 YEARS, OCC- ENGINEER, R/O. BANASHANKARI NAGAR, STAGE III, BENGALURU-560050 (c) SRI. PUSHPHAS S/O. LATE GOPAL HARAPANAHALLI AGE- 34 YEARS, OCC- CHEMICAL ENGINEER, R/O. ERNAKULAM, KERALA, INDIA-682011 (BY SRI. SRIKANT T. PATIL, ADV.) AND:

1. THE KARNATAKA FINANCIAL SERVICES LTD., NO: 13, KRISHNA REDDY LAYOUT, DOMLUR, BENGALURU-560 001.

2. MR. SADASHIVARAO, CHAIRMAN OF KARNATAKA FINANCIAL SERVICE LTD., BENGALURU - 560001. …APPELLANTS …RESPONDENTS (BY SRI. SRI NARAYAN V. YAJI, ADV. AND SRI. VISHWANATH K. BHAT, ADV. FOR R2 R1 SERVED) *** THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C. SEEKING TO SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL PASSED BY THE I-ADDNL. CIVIL JUDGE (JR.DN.) J.M.F.C. DHARWAD IN C.C.NO.605/2009, DATED 13.04.2011. - 9 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 THESE CRIMINAL APPEALS COMING ON FOR ARGUMENTS AND THE SAME HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON

20.06.2023, THIS DAY THE COURT PRONOUNCED THE FOLLOWING: JUDGMENT Appellant/complainant in all these appeals challenging judgment of acquittal passed by the trial court on the file of I Additional Civil Judge and JMFC, Dharwad, dated 13.04.2011 as per the following chart:

2. Sl. Name of No Complainant 1. Smt.Radha S. Deshapande Gopal D. Harapanahalli 3. Rajeshwari G. Harapanahalli Gopal D. Harapanahalli 5. Rajeshwari G. Harapanahalli Gopal D. Harapanahalli Gopal D. Harapanahalli

4. Cheque No. 149345 Amount C.C. No. CRL. A. No. 24,000/- 606/2009 2765/2011 154354 7,30,000/- 600/2009 2759/2011 154356 1,05,378/- 601/2009 2760/2011 149352 40,000/- 602/2009 2761/2011 154355 1,62,000 603/2009 2762/2011 149351 40,000/- 604/2009 2763/2011 149339 40,000/- 605/2009 2764/2011

2. Parties to the appeals are referred with their ranks as assigned in the trial Court for the sake of convenience.

3. The factual matrix leading the case of complainant in all these appeals can be stated in nutshell to the - 10 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 effect that complainant in each cases invested money as referred in the above chart with accused No.1 company, which offered attractive rate of interest. The registered office of accused No.1 company is at Bangalore and accused Nos.2 to 6 are board of directors and office bearers of Karnataka Financial Service Limited, Bangalore, who floated bonds scheme to collect amount in the form of fixed deposits/bonds. All the accused directors are in-charge of company affairs and responsible for conducting day to day business of company. Hence, all the directors are liable. On maturity, accused No.1 company did not pay money with interest as agreed. Accused No.1 company issued cheque to each complainant being part of invested money with interest. On presenting cheque for encashment, same were bounced for want of sufficient fund in the account of accused No.1 company. The demand notice was issued and it is only accused Nos.2 to 5 have replied to notice given by complainant. They failed to pay amount as called upon in the notice. Therefore, complainant in each case filed complaint. - 11 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011

4. The complaint in all the cases was originally registered against accused Nos.1 to 6. This Court in Criminal Petition Nos.4344 to 4347, 4349 to 4355/2004 by order dated

28.5.2005 quashed proceedings against accused Nos.3 to 5. The proceedings against accused Nos.2 and 6 were ordered to be continued.

5. Accused Nos.2 and 6 appeared through counsel. Subsequently, case against accused No.6 was ordered to be split up and proceedings continued only against accused No.2, who is chairman of accused No.1 company. The trial Court by appreciation of evidence on record acquitted accused No.2 in each case from charges leveled against him.

6. Appellant/complainant feeling aggrieved judgment of trial Court preferred the appeal in all the cases referred above contending that trial Court has committed serious error in holding that vicarious liability of accused No.2 for the offence punishable under Section 138 of N.I.Act has not been established. The trial Court has conveniently ignored documents Exs.P.14 to 30, which were confronted in the cross examination of P.W.1 and there was no reason to disown the - 12 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 said documents. The trial Court has recorded erroneous finding that accused No.2 was only Chairman of accused No.1 company and not concerned with day to day affairs of company, but the same is contrary to evidence on record. The liability fixed on accused No.6 alone, who is signatory to cheque does not absolve accused No.2 from vicarious liability to answer claim against accused No.1 company, to which he was admittedly the Chairman. The approach and appreciation of oral and documentary evidence by trial Court is contrary to law and evidence on record. Therefore, prayed for allowing all appeals and to set aside judgment of acquittal of the trial Court. Consequently, to convict accused No.2 for the offence punishable under Section 138 of N.I.Act.

7. In response to notice accused No.2 appeared through counsel.

8. Heard the arguments of both sides.

9. On careful perusal of oral and documentary evidence placed on record by complainant in all the cases and accused No.2, it would go to show that complainant in all the - 13 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 cases invested their money in accused No.1 company, which offered attractive rate of interest for their investment. On maturity of amount, the company did not pay back maturated amount with interest. Accused No.2 is chairman of accused No.1 Company and accused No.6 is signatory to cheque issued in all these cases. The demand notice issued by complainant in all the cases were not responded by making payment and only reply is given by accused Nos.2 to 5, accused Nos.1 and 6 did not reply to demand notice. Therefore, complaint came to be filed. The amount covered under cheque in each case is part of amount of their investment with interest. On presentation of the said cheques, the same were dishonoured. These facts are not disputed by accused No.2. The dispute is only with respect to vicarious liability of accused No.2 being the chairman of accused No.1 company to make good of all money covered under the cheque in each case.

10. Learned counsel for appellant in all the cases argued that cheques have been issued to different persons, who have invested their money in accused No.1 company. The maturity amount with interest was not paid. The accused No.2 - 14 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 is chairman of accused No.1 company and responsible for conducting day to day business of company and he is vicariously liable to pay amount covered under the cheque. The Chairman and Director of accused No.1 company consultation with each other issued cheque with signature of accused No.6 for lawful discharge of debt. The trial Court has committed serious error in exonerating accused No.2 from answering claim of complainant in each case representing accused No.1 company.

11. Per contra, learned counsel for respondent argued that respondent No.2 is only the chairman authorized to preside over meeting of the company and he has to conduct meetings and take decisions. Accused No.6 is Executive Director of company, who was authorized by resolution to look after day to day affairs of accused No.1 company. Therefore, respondent No.2 is not vicariously liable to answer claim of complainant in each case representing company.

12. Learned counsel for complainant relies on Ex. P 14 and 15 two letters of accused No.1 company, Ex.P16 minutes of the meeting, Ex.P17 reply of accused No.2 to the demand - 15 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 notice issued by the complainant and Ex.P19 certified copy of order of this Court in Crl.P.Nos.4344-4347, 4349-4355/2004 where under the proceeding were quashed only against accused No.3 to 5 and order to continue the proceedings against accused No.2. Reliance is also placed on the admitted documents Exs.P 20 to P 29 and the signature of the accused No.2.

13. The documents Exs.P.14 to 30 confronted to complainant P.W.1 during the course of cross examination, would go to show that accused No.2 has signed the documents and reply to demand notice being the Chairman of accused No.1 company. The documents at Exs.P.20 to P.29 would go to show that signature of accused No.2 is appearing in the said documents as chairman of the accused No.1 company. The mere fact that accused No.2 has signed as chairman in Exs.P.20 to 29, it cannot be said as sufficient evidence to hold that he was responsible for conducting day to day affairs of the company. It is not in serious dispute that respondent No.2 is Charted Accountant in M/s. K.P.Rao and Company since 1972 and he was appointed as director of accused No.1 company - 16 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 from its inception and he was appointed as chairman in 1996 to preside over meetings of accused No.1 company. It is the contention of accused No.2 that accused No.6 named in complaint is whole time director and was in-charge of day to day affairs of company, he was re-appointed in the same capacity on 29.12.2000 as Executive Director. In the tenth annual report for the year 1999-2000, item No.5 speaks about resolution passed for re-appointing accused No.6 as whole time director of the company for a period of five years dated

11.5.2000.

14. In order to appreciate the said contention, it is useful to take note of clause 13(b) of Articles of Association Ex.P.18 of accused No.1 company, which reads as follows: “Subject to the superintendence, control and direction of the board of directors the date to day management of the company shall be in the hands of the managing director and/or whole time director. The board may from time to time, entrust and confer upon a managing or whole time director/directors any of the powers exercisable by it as it thinks fit and may confer such powers for such time, and to be exercised for such objects and purposes and on such terms - 17 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 and conditions and with such restrictions as it may think expedient and may from time to time, revoke, withdraw, alter to very or any of such powers.” On plain reading of the said provision in the Articles of Association of accused No.1 company, it is evident that the board of directors are empowered to appoint managing director and/whole time director to look after day to day affairs of the company. In this context Section 175 of the Companies Act regarding authority of the chairman would go to show that chairman has got power to decide the questions raised at a meeting and further to conduct the proceedings. Complainant has not produced any document to show that accused No.2 apart from being appointed as a chairman was also entrusted with responsibility to look after the day to day work of accused No.1 company. The tenth annual general body meeting report of accused No.1 company at Ex.D.2, item No.5 special business resolution would speak about accused No.6 is appointed as whole time director of accused No.1 company for a period of 5 years from 11.5.2000. Therefore accused No.6 was appointed as whole time director to look after the day to day affairs of accused No.1 company. - 18 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011

15. Complainant has not produced any document to show that accused No.2 being chairman by any resolution of accused No.1 company was appointed to look after the day to day affairs of company. Indisputably, accused No.2 is Charted Accountant in M/s. K.P.Rao and Co., and he was appointed as a chairman of accused No.1 company. When that being so, accused No.2 cannot engage himself in any business or occupation other than the profession of Charted Accountant, unless permitted by the competent authority. In terms of Section 21(4) of the Indian Charted Accountants, liable for professional misconduct. In the present case, there is no evidence to show that accused No.2 was permitted to accept whole time chairmanship of accused No.1 company and admittedly he still continue to be practicing the profession of Charted Accountant . If accused No.2 was to be appointed as whole time director of accused No.1 company then he cannot continue the practice of a Charted Accountant. There is no any evidence on record to show that accused No.2 is appointed as whole time director of accused No.1 company by way of any resolution of Board of Directors. The quashing of proceedings against accused No.3 to 5 and ordering to continue proceedings - 19 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 against accused No.2 as per Ex. P19 does not mean that accused No.2 was responsible for conducting day to day affairs of the company. The said issue has to be decided by the Court after taking necessary evidence.

16. It is true that accused No.2 has signed as chairman of accused No.1 company in some of the documents confronted to P.W.1 during the course of cross examination as per Exs.P.14 to 30. However, the said documents does not speak that accused No.2 by way of resolution of accused No.1 company in the capacity of chairman was empowered to discharge the duty as whole time director of the company. In view of above referred clause No.13(b) of Articles of Association as per Ex.P.18 the board of directors are required to pass necessary resolution empowering the chairman to discharge the duty of whole time director and responsible to look after day to day affairs of accused No.1 company.

17. The pleadings in the complaint at para 3 and 5 would only speaks about accused Nos.2 to 6 are board of directors and office bearers of Karnataka Financial Service Limited, Bangalore floated bond scheme to collect amount in - 20 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 the form of fixed deposits/bonds. All accused directors are in- charge of company affairs and responsible for conducting day to day business of company. Hence, all directors are liable. In para 5 it is pleaded among the board of directors accused No.6 is executive director authorized by the board of directors to issue a cheque on behalf the company to creditors. This pleading in complaint and evidence of P.W.1 would go to show that even according to complainant accused No.6 is the executive director authorized by board of directors to issue cheque on behalf the company to creditors. There is no any pleadings in the complaint that accused No.2 being chairman was authorized by resolution of accused No.1 company to look after day to day affairs of company.

18. Learned counsel for respondent No.2 in support of his contention that respondent No.2 is not vicariously liable to answer claim covered under the cheque of complainant in each case relied on judgment of the Hon'ble Apex Court in Pooja Ravinder Devidasani V/s. State of Maharashtra and others reported in (2014) 16 SCC 1, wherein it has been observed and held that, - 21 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 "Section 138 and 141 of Negotiable Instrument Act-dishonour of cheque, offence by companies. For making director liable, held, there must be specific averments against the director shown as to how and in what manner he/she was responsible for conduct of business of the company. Liable if only he/she was in charge of and was responsible to company for the conduct of its business or if it is proved that offence was committed with consent or connivance of, or was attributable to any negligence on part of director concerned. Simply because a person is a director of a company, does not make him/her liable under N.I.Act. Hence, mere verbatim reproducing words of sections without a clear statement of fact supported by proper evidence not enough to make vicariously liable." In view of the principles enunciated in this judgment, it is evident that there must be specific averments in the complaint fixing the responsibility of director to conduct business of company to make the director vicariously liable is necessary. It must also be demonstrated by evidence on record that such director under proper authority of company was in-charge and responsible for conduct of business of the company. In the absence of any such evidence on record, just because a person - 22 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 is chairman or director of the company cannot be made vicariously liable to answer claim of company. In the present case neither there are any pleadings nor tangible evidence to prove that accused No.2 being chairman of accused No.1 company was authorized by way of resolution to conduct day to day affairs of company.

19. The trial Court by referring to judgment of the Hon'ble Apex Court and judgment referred in para 47 to 55 earlier to Pooja’s case referred above on the same principle regarding vicarious liability and also taking note of provisions of the Companies Act has held that in the absence of specific averments as to the role of accused, absence of any authorization from company authorizing accused No.2 being chairman to attend the day to day affairs of the company, and for want of supportive document held that complainant has failed to prove that accused No.2 is vicariously liable to answer the claim of accused No.1 company with reference to the amount covered under the cheque involved in the above cases. It has also recorded finding that accused No.6 has specifically authorized by accused No.1 company to attend day to day - 23 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 affairs of company and he is authorized signature is admitted by complainant himself. DW 1 in his evidence got marked tenth Annual General Body meeting Annual report of accused company Ex. D2 and Annual report of accused No.1 company for the year 2001-02 Ex. D3. The tenth Annual report of accused No.1 company for the year 1999-2000 would go to show that item No.5 there is a resolution passed by accused No.1 company dated 11.05.2000 to re appoint accused No.6 as whole time director of accused No.1 company. The trial Court by taking note of Section 291 of Companies Act and in view of the principles enunciated in the judgment of Hon'ble Apex Court referred in para 55 of it's judgment has recorded finding that Board of Directors of the company has got powers to appoint any person for conducting day to day business of the company. In the present case, absolutely there are no any documents to show that accused No.2 by resolution of accused No.1 company was authorized to be in charge of the day to day affairs of the company.

20. The trial Court on proper appreciation of material evidence on record has rightly recorded finding that accused - 24 - CRL.A No. 2765/2011 C/W CRL.A NO. 2759/2011, CRL.A NO. 2760/2011, CRL.A NO. 2761/2011, CRL.A NO. 2762/2011, CRL.A NO. 2763/2011, CRL.A NO. 2764/2011 No.2 is not vicariously liable to answer the claim of amount covered under cheque issued on behalf of company. The findings recorded by the trial Court in acquitting accused No.2 are based on the material evidence placed on record and there are absolutely no valid reasons to interfere with the findings recorded by the trial Court. Consequently, proceed to pass the following ORDER The appeals filed by appellant/complainant in all the above referred cases are hereby dismissed. The judgment of the trial Court on the file of I Addl. Civil Judge and JMFC, Dharwad in CC.Nos.606/2009, 600/2009, 601/2009, 602/2009, 603/2009, 604/2009, 605/2009 all dated

13.4.2011 are hereby confirmed. The Registry is directed to transmit the records with the copy of this judgment to trial Court. Vb/gsr/mv Sd/- JUDGE