Cheque Dishonour under Sec. 138 of Negotiable Instruments Act, 1881 in Transactions Related to Property

Cheque Dishonour under Sec. 138 of Negotiable Instruments Act, 1881 in Transactions Related to Property

Section 141 - Corporate Criminal Liability  - Validity of Summoning Orders - Property Transactions and Cheque Dishonour -  A [accused] was issued summons by Magistrate in a case of complaint filed under S.138 of N.I. Act, 1881 - Company [A2] was also the accused - Complainants [C] were homebuyers - A argued that orders passed by Magistrate were done in mechanical manner - Held, a plain reading of this Section "makes it amply clear that if an offence under section 138 NIA has been committed by a company then 'every person‟ who was in charge of and responsible to the company for its conduct of business at the relevant time when such offence was committed will be held guilty under the said provision, provided the accused person proves that the offence occurred without his knowledge or despite his due diligence. The section further extends the liability to any such director, manager, secretary or other officer of the company in case it is proved that the offence was committed with the consent or connivance or is attributable to neglect on their part" - "Merely mentioning the designation of the accused person in the company or reproducing the phraseology of the section 141 NIA is not sufficient to attract the guilt under section 141 NIA. The law is no longer res integra that specific allegations/averments have to be made as to how and in what manner the accused alleged to have committed an offence under section 138 NIA, was responsible for, or had a role in the conduct of the business of the company, at the relevant time, when the offence is said to have been committed." - "To attract vicarious liability under section 141 NIA, specific role must have been played and ascribed qua the accused." - "Summoning of an accused is a serious matter and the criminal law machinery cannot be set in motion as a matter of due course." - Held, A has to be acquitted and summons issued to A [accused] has to be quashed. Order of Magistrate was set aside in exercise of powers under S.482 of Code of Criminal Procedure, 1973- Varun v. Amit Khanna [2023] GCtR 1570 (Delhi)