Cheque bounce case – Vicarious liability of Managing Director/ Joint Managing Director -- If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company -- It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time.

(SC) Decided on: 06.07.2009

Signature on cheque by Director/ Officer of Company – In the case of a director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence -- The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141.

(SC) Decided on: 06.07.2009

Vicarious liability of Deputy General Manager -- A Deputy General Manger is not a person who is responsible to the company for the conduct of the business of the company -- He does not fall under any of the categories (a) to (g) listed in section 5 of the Companies Act -- Therefore the question whether he was in charge of the business of the company or not, is irrelevant -- He cannot be made vicariously liable under Section 141(1) of the Act -- If he has to be made liable u/s 141(2), the necessary averments relating to consent/connivance/negligence should have been made -- No such averment made -- Hence Deputy General Manger could not be prosecuted either u/s (1) or u/s (2) of Section 141 of the Act.

(SC) Decided on: 06.07.2009