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Judgment
H.N. Nagamohan Das, J.—Respondent No. 1 filed a private complaint in PCR No. 2096/2002 for the offences punishable u/s 138 of the Negotiable Instruments Act. The jurisdictional Magistrate registered the case, recorded the sworn statement and had taken cognizance of the offence in C.C. No. 27432/2002 and issued process. Aggrieved by the initiation of criminal proceedings and issuing of process the petitioner is before this Court. Petitioner is accused No. 3 in the proceedings before the trial Court. In the complaint it is alleged as under:
It is humbly submitted that to the knowledge of this Complainant all the Accused No. 2 to 8 are Directors of Accused No. 1 Company being in-charge and responsible for its conduct of business managing its day to day affairs. Hence, all of them are liable to be jointly tried with in the above proceedings.
Petitioner has also relied/on the annual report specifying that accused No. 2 is the Executive Director and Secretary of accused No. 1 company. Petitioner-accused No. 3 is described as the Director. It is not the case of respondent that the petitioner is the signatory to the cheques involved in this case. In the absence of specific allegations against the petitioner, supporting evidence and that he is not the signatory to the cheques, proceedings against him are liable to be quashed. In identical circumstances the Supreme Court in the case of N.K. Wahi Vs. Shekhar Singh and Others, held as under: 7. This provision clearly shows that so far as the companies are concerned if any offence is committed by it then every person who is a Director or employee of the company is not liable. Only such person would be held liable if at the time when offence is committed he was in charge and was responsible to the company for the conduct of the business of the company as well as the company. Merely being a Director of the company in the absence of above factors will not make him liable.
For the reasons stated above, the following; ORDER
i. Petition is hereby allowed.
ii. Proceedings in C.C. No. 27432/2002 pending on the file of XX Additional Chief Metropolitan Magistrate, Bangalore against the petitioner are hereby quashed.
iii. The trial Court to proceed against the other accused in accordance with law.