ASHOK MUTHANNA Vs. ESCORTS FINANCE LTD

JUDGEMENT

(1.) In this petition, the petitioners who are accused 2 to 8 before the trial Court are seeking to quash the entire proceedings in C.C.No.8736 of 1999 on the file of the XIV Metropolitan Magistrate, Egmore.

(2.) The short facts are: The respondent/complainant filed a complaint under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act for short) against the petitioners and three others, as the cheque issued for Rs.24,99,840/- has been dishonoured, accused No.1 is the company and accused 9 and 10 are the signatories of accused No.l. Except the bald allegation that the petitioners are directors, no overtact has been attributed to them in the complaint. The complainant without even ascertaining the fact the petitioners 3 and 6 are dead and petitioners 4,5 and 7 have retired from the company two years ago, has filed the complaint. Petitioners 4,5 and 7 are only employees of the first accused company and they left the services of the company in 1997 itself, but they have been wrongly described as Directors of the company.

(3.) The learned Counsel for the petitioners strenuously contended except the vague allegation in the complaint that the petitioners are also responsible for the conduct of the business of the Company and they are also liable for the offence committed by the first accused, there is no other material to show prima facie that there was any act committed by the petitioner, from which a reasonable inference can be drawn of their vicarious liability. It is pointed out not even the requirements as embodied in Sec. 141. Sub-clause (2) of the Act, namely, the offence has been committed by the company with the consent or connivance and negligence on the part of the petitioners. It is argued that the allegations made in the complaint are most vague and therefore, no vicarious liability can be attached to the petitioners. The other contention that had been raised is without even ascertaining that petitioners 3 and 6 are dead and petitioners 4.5 and 7have retired from the company two years ago, but the complaint has been filed in a mechanical and casual way. To substantiate the fact that petitioners 3 and 6 are dead and petitioners 4,5 and 7 have retired from the company, a certified copy of Form No.32 issued by the company secretary has been produced for the perusal of this Court, which supports the case of the petitioners.