Negotiable Instruments Act, 1881 – s.138 r/w. s.142 – The grievance of the complainant-respondent is that in-spite of regular follow-ups and reminders, the company-accused no.1 failed and neglected to clear the respondent’s dues – On repeated demands, the company furnished respondent five cheques – When complainant deposited the cheques, they were returned unpaid with reason “payment stopped by drawer” – Accordingly, the respondent filed two complaints u/s. 190(i)(a) of the Cr.P.C. for offences punishable u/ss. 138 & 142 of the N.I. Act – Both the complaints were filed against three accused persons including appellant herein (accused no.3) – Appellant sought to quash criminal proceedings against her u/s. 482 Cr.P.C, however the same was dismissed by the High Court – Propriety:

Held: On perusal of the complaint, it is clear that the only allegation against the present appellant is that she and the accused No.2 had no intention to pay the dues that they owe to the complainant – It is stated that the 2nd accused and the 3rd accused (appellant herein) are the Directors, promoters of the 1st accused being the Company – It is further averred that the 2nd accused is the authorized signatory, who is in-charge of and responsible for the day-to-day affairs of the Company, i.e., the 1st accused – It can be clearly seen that there is no averment to the effect that the present appellant is in-charge of and responsible for the day-to-day affairs On perusal of the complaint, it is clear that the only allegation against the present appellant is that she and the accused No.2 had no intention to pay the dues that they owe to the complainant – It is stated that the 2nd accused and the 3rd accused (appellant herein) are the Directors, promoters of the 1st accused being the Company – It is further averred that the 2nd accused is the authorized signatory, who is in-charge of and responsible for the day-to-day affairs of the Company, i.e., the 1st accused – It can be clearly seen that there is no averment to the effect that the present appellant is in-charge of and responsible for the day-to-day affairs of the Company – It is also not the case of the respondent that the appellant is either the Managing Director or the Joint Managing Director of the Company – The averments made are not sufficient to invoke the provisions of s.141 of the N.I. Act qua the appellant – Thus, the criminal proceedings in connection with the offence punishable u/s. 138 r/w. s.142 of the N.I. Act are quashed and set aside qua the present appellant. [Paras 19-22]

Negotiable Instruments Act, 1881 – s.138, s.141 – Vicarious liability of the director:

Held: Merely reproducing the words of the section without a clear statement of fact as to how and in what manner a director of the company was responsible for the conduct of the business of the company, would not ipso facto make the director vicariously liable. [Para 12]