D.K. Jain, J.
1. In this petition under Section 482 of the Criminal Procedure Code, 1973, the petitioners pray for setting aside of the order passed by the learned Metropolitan Magistrate on August 17, 1996, directing framing of charge against them under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the Act').
2. Mahendra Steel Tubes Limited, accused No. 1, issued certain cheques signed by its chairman-cum-managing director, accused No. 2, in favor of respondent No. 1 for purchasing certain goods from them. The said cheques, on presentation were received back unpaid with the remark 'insufficient funds'. Thereupon, a legal notice was issued on behalf of respondent No. 1 to the affronted company demanding payment and there being no response to the notice, a complaint under the said section was filed against the company, and its three directors, viz., the chairman-cum-managing director and the petitioners, the other two directors of the company. After pre-summoning evidence, all the named accused were summoned and charge under Section 138 of the Act was framed against all of them.
3. The present petition has been filed by the two directors (other than chairman-cum-mangling director) assailing framing of charge against them on the ground that they never were in charge of the conduct of the business of the accused-company and, thereforee, cannot be made vicariously liable for an offence committed by it.
4. I have heard learned counsel for the parties.
5. For the petitioners, it has been urged that there is no averment or allegation in the complaint nor an iota of evidence on record to show that the petitioners were in charge of the conduct of the business of the company or that the offence in question was committed with their consent or connivance and, thereforee, charge under Section 138 of the Act would not be framed against them. In support, reliance is placed on a decision of the Supreme Court in Municipal Corporation of Delhi v. Ram Kishan Rohtagi, : 1983CriLJ159 , and a recent decision of this court in Vikas Pahwa v. State [1996] 4 Cri 520 .
6. For the contesting respondent No. 1, it has been submitted that having regard to the language of Section 141 of the Act, which is wide in amplitude, all the persons named in the complaint can be proceeded against under the said section even in the absence of an averment in the complaint to the effect that the said persons were in charge of the conduct of business of the company, Learned counsel seeks to derive some support from the observations of the Madras High Court in N. Doraisamy v. Archana Enterprises [1995] 2 CCC 378 ; [1999] 97 CC 129
7. I am unable to persuade myself to agree with learned counsel for respondent No. 1.Section 141 of the Act reads as follows :
'141. Offences by companies-- (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in Sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.'
8. The position in law is very clear. Officers of the company, who may be held vicariously liable fall in two categories : (i) those who are in charge of the company and responsible for the conduct of its business and (ii) persons other than those falling in the first category, who is a mere director, manager or secretary, etc., of the company. Sub-section (1) deals with the first category and Sub-section (2) with the second category.
9. Sub-section (1) of Section 141 of the Act provides that when an offence under Section 138 is alleged to have been committed by a company, every person, who, at the time of the commission of the offence, was in charge of and was responsible to the company for the conduct of its business, can be made vicariously liable for the offence committed by the company. Sub-section (2) further provides that persons other than covered by Subsection (1), who are mere directors, or managers, etc., can be hauled up only if the offence by the company has been committed with the consent or connivance of the person falling in that category or is attributable to him, for which there should be averments in the complaint or prima facie proof for it. The section being penal had to be construed strictly. The initial onus to prove that a person was in charge of and was responsible to the company for the conduct of its business at the relevant time is obviously on the complainant. Even after the complainant discharges the initial onus as per proviso to the said section, the person accused can still prove that the offence committed by the company was without his knowledge or that he had exercised due diligence to prevent the commission of such offence. There is no gainsaying that the stage to prove that a person,falling in Sub-section (1), was in charge of and responsible for the conduct of the business of the company or that the offence was committed by the person, falling in Sub-section (2), with his consent or connivance or is attributable to him, would arise only when the basic facts in that behalf are first pleaded in the complaint. In the absence of these basic facts it will neither be possible nor permissible to the complainant to bring home the charge of vicarious liability under Section 141 of the Act.
10. Applying the above principle of law to the facts in hand, I feel that the order framing the charge against the petitioners cannot be sustained. A perusal of the complaint and the pre-summoning evidence shows that the cheques in question were issued by Shri Ajit Singh Ratra, the chairman and managing director of the accused-company, who, being in charge of the company, was also cited as one of the accused. There is no averment or allegation in the complaint or pre-summoning evidence even to obliquely suggest that the petitioners/directors were at any point of time directly or indirectly in charge of and responsible to the company for the conduct of its day-to-day business or any material on record which may even remotely suggest that the alleged offence was committed with the consent or connivance of, or was attributable to any neglect on the part of the petitioners. In the absence of such an averment/evidence, in my view, the petitioners cannot be roped in under Section 141 of the Act.
11. With utmost respect, I am unable to subscribe to the view expressed by a learned single judge of the Madras High Court in N. Doraisamy v. Archana Enterprises [1995] 2 CCC 378 ; [1999] 97 CC 129 to the effect that even in the absence of specific averments in the complaint with regard to the responsibility of a person vis-a-vis the company, in relation to its business, a prosecution can be launched against those, who had been just named in the complaint.
12. For the foregoing reasons, the impugned order dated August 17, 1996, to the extent it proceeds to frame charge against the petitioners under Section 138 of the Act is set aside and the petitioners are discharged.
13. The petition stands disposed of.
14. The file of the trial court may be sent back forthwith.