K.P.G. Nair vs State And Ors.
2007 Latest Caselaw 1693 Del

JUDGMENT

Pradeep Nandrajog, J.

1. Petitioner has been imp leaded as accused No. 4 in the complaint filed by respondent No. 2. As accused No. 4, in the memo of parties he is described as under: Mr. K.P.G. Nair, Executive

2. Material allegations against the petitioner and other living human beings imp leaded as co-accused, i.e. accused Nos. 2, 3 and 5 are in para 10 of the complaint. Following is Page 1 of 4 averred:

10. That the Accused No. 1 is the company and accused Nos.2 to 5 are its Principal Officer and have committed an offence punishable under Section 141 of Negotiable Instrument Act as amended, 1988.

3. The averments in the complaint fall short of actionable averments in view of the law laid down as per the following judgments:

1. K.P.G. Nair v. Jindal Menthol India Ltd. JT 2000 (Suppl.) SC 519

2. Katta Sujatha (Smt.) v. Fertilizers and Chemicals Travancore Ltd. and Anr.

3. Monaben Ketanbhai Shah and Anr. v. State of Gujarat and Ors. 2004 (3) JCC (NI) 158

4. S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. 2005 (7) SCALE

5. Sabitha Ramamurthy and Anr. v. R.B.S. Channabasavardhya

6. S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. 2007 (3) SCALE

7. Saroj Kumar Poddar v. State (NCT of Delhi) and Anr.

8. P. Rajarathinam v. State of Maharashtra and Ors.

9. N. Rangachari v. Bharat Sanchar Nigam Ltd. JT 2007 (6) SC 292

10. K. Srikanth Singh v. North East Securities Ltd. and Anr.

11. Raghu Lakshminarayanan v. Fine Tubes JT 2007 (5) SC 552

4. Suffice would it be to note that where the main accused is a corporate entity, vis-a-vis living human beings imp leaded as accused, there have to be positive averments that they were in charge of and were responsible to the company for the conduct of the business of the company or that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of said living human being.

5. The reason is obvious. Under Section 141 of the N.I. Act, 1881 vicarious liability of a company is extended to the shoulders of such persons.

6. But for Section 141 of the N.I. Act, 1881, pertaining to a cheque issued by a company, such persons would not be vicariously liable for the debt of the company.

7. Before concluding, I may further note that in the pre-Page 3 of 4 summoning evidence recorded, not a word has been whispered vis-a-vis the liability of the petitioner.

8. Petition is accordingly allowed.

9. The complaint and the summoning order dated 7.8.1998 against the petitioner is quashed.

10. No costs.