Manismran Kaur

New Delhi, May 12, 2022:  The Delhi High Court has held that through the legal fiction created by Section 141 of the Negotiable Instruments Act, the Directors and other persons responsible for the conduct of its business also become vicariously liable but if no offence is attributed to the company, then such persons responsible for the conduct of its business cannot be saddled with any liability.

Dismissing  the petition instituted by the complainant to assail the orders of the Trial Court and the Appellate Court dismissing the complaint case of the petitioner, the Single Bench of Justice Asha Menon observed that when there is no averment at all in respect of the Company, amendments as sought by the petitioner would be a complete overhauling of the first complaint and a clear attempt to overcome the foundational infirmity of the absence of any offence having been committed by the Company on the averments in the complaint.

The petition was filed under Section 482 Cr.P.C. by the complainant for setting aside the orders passed by the Trial Court and Appellate Court respectively, dismissing his complaint case.  Factual background of the case was that the petitioner filed a complaint case under Section 138 of the Negotiable Instruments Act against the respondent. It was with regard to a dispute wherein a commercial space owned by the petitioner had been let out to the respondent’s company through its Managing Director i.e., the respondent. The respondent was alleged to have issued five cheques across the company duly signed by him as Managing Director to discharge the company’s liability to pay the rent which bounced. As a result of which, the complaint was filed.

After hearing the submission of the parties, the Court observed that in the present case all the averments were against the Managing Director of M/s Accura Care Pharmaceuticals Pvt. Ltd.  It was opined that there were no pleadings that suggested that the Company had committed any offence. Additionally, it was observed that since no offence was attributed to the Company, hence it was not  possible to attach liability on the Managing Director under the provisions of Section 141 of the N.I. Act. 

Referring to the case of Anil Hada v. Indian Acrylic Ltd, the Court observed that the Company being the primary accused must be found to have committed an offence. The Bench said, “In other words, there is no pleading which suggests that the Company had committed any offence. When no offence is attributable to the Company, it is not possible to attach liability on the Managing Director by the deeming provisions of Section 141 of the N.I. Act.” 

With respect to the amendments, the Court observed that simple technical infrimites can only be amended, however filing of fresh complaint with improved pleadings under the blanket of amendment cannot be allowed, the Court remarked. Reliance was placed in the case of Anil  Hada (supra)  and SMS Pharmaceuticals Ltd. vs. Neetu Bhalla. Thus, in the light of the above observations, the petition was dismissed on account of being meritless.

0 CommentsClose Comments

Leave a comment