JUDGMENT
Manju Goel, J.
1. This petition invokes the jurisdiction of this court under Section 482 of the Code of Criminal Procedure (in short `Cr.P.C.’) for quashing the order dated 22.8.2003 whereby the petitioner was summoned to stand trial as an accused in the Complaint Case No. 1372/1 titled Industrial Investment Bank of India Ltd. v. Shamken Cotsyn Ltd. and Ors.
2. The copy of the complaint has been placed on the record. The principle accused in this case is M/s. Shamken Cotsyn Ltd. The petitioner, H.B. Chaturvedi, is accused No. 2 and is described as the Chairman of M/s. Shamken Cotsyn Ltd. The other accused are the Joint Managing Director and Directors of the accused No. 1. The complainant, Industrial Investment Bank of India Ltd., sanctioned a term loan of Rs.500 lakhs under a loan agreement dated 31.5.2000. By way of part payment of dues, accused No. 1 issued chequ bearing Nos. 318204 and 318206 dated 8.7.2003 and 30.6.2003 amounting to Rs.3 lakhs each drawn on City Bank, New Delhi in favor of the complainant. On presentation, the two cheques were dishonoured with the remarks ”Account Closed”. The complainant thereafter fulfillled the formalities of issuing a statutory notice as provided under Section 138 of the Negotiable Instrument Act, 1881 (in short the `Act’) and filed the complaint on failure of accused No. 1 in paying the amounts under the two cheques. Coming to the criminal liability of the petitioner for the offence of the accused No. 1 the complainant has the following to say in the complaint, ”The Accused No. 2 is the Chairman of the Company and Accused No. 4-7 are the Directors of the Company who are involved in day to day functioning of the Company.” On these allegations and on an affidavit filed by the complainant the Metropolitan Magistrate summoned the petitioner along with other accused vide the impugned order.
3. It is submitted on behalf of the petitioner that no case for summoning the petitioner has been made out under Section 141 of the Act as the section permits only those in charge and responsible for the conduct of the business of the company to be prosecuted for the offence of a company and not a person by virtue of holding the office of the Chairman. The petition is opposed by respondent No. 2 who is the complainant. ??????
4. For considering the question in hand it is necessary to have a look at Section 141 of the Act which is as under:
5. The allegations in the complaint when compared with the requirement of Section 141 are clearly insufficient for fastening any criminal liability on the petitioner. Section 141(1) imposes responsibility on those who are in charge and responsible to the company for the conduct of the business of the company. Section 141(2) imposes liability for the offence of the company on such Director, Manager, Secretary or other office of the company who may have consented or connived in the offence or to whom any neglect in complying with the liability can be attributed. Accused No. 2/petitioner has been described as the Chairman of the company. There is no allegation anywhere in the complaint that he falls either in the group of persons falling under sub-Section (1) of Section 141 of the Act or in the group of persons falling under sub-Section (2) of Section 141 of the Act. The petitioner cannot be held to be responsible for the offfence under Section 138 of the Act merely because he is the Chairman of the company.
The Company Act does not make a Chairman responsible for the conduct of the day to day business of the company. Nor it can be inferred that a person has consented or connived in the commission of the offence or is involved in the commission on account of any commission or omission simply because of the fact that he is the Chairman of the company. Therefore, the Metropolitan Magistrate was not right in summoning the petitioner for the offence of the company. The impugned order is accordingly quashed and the petitioner is discharged.