ADVERTISEMENT
Karnataka High Court
Kavitha Chopra vs M/S 63Ideas Infolabs Pvt Ltd., … on 1 July, 2026
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 07.04.2026 R
Pronounced on : 01.07.2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 01ST DAY OF JULY, 2026
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.1978 OF 2026
C/W
CRIMINAL PETITION No.2041 OF 2026
CRIMINAL PETITION No.2091 OF 2026
CRIMINAL PETITION No.2797 OF 2026
CRIMINAL PETITION No.2854 OF 2026
IN CRIMINAL PETITION No.1978 OF 2026
BETWEEN:
Digitally signed KAVITHA CHOPRA
by PADMAVATHI AGED ABOUT 47 YEARS
BK W/O DHIRENDRA,
Location: High DIRECTOR OF OSIA HYPER RETAIL LIMITED,
Court of 4D SQUARE BASEMENT ONE,
Karnataka
VISAT TO GANDHINAGAR HIGHWAY,
MOTERA, AHAMEDABAD
GUJARAT - 380 005.
... PETITIONER
(BY SMT.KEERTHI REDDY, ADVOCATE FOR
SRI MADESH V.M., ADVOCATE)
2
AND:
M/S. 63IDEAS INFOLABS PVT. LTD., (NINJACART)
R/O. AT, INDIGUBE HELIOS BUSINESS PARK,
TOWER-E, 2ND FLOOR, CHANDANA,
KADUBEESANAHALLI, PANATHUR,
BENGALURU - 560 103
REPRESENTED BY ITS AUTHORIZED
REPRESENTATIVE
MR. KARTHIKEYA YADAV
MOB: 9986447908
EMAIL: [email protected]
... RESPONDENT
(BY SRI BHARATH KUMAR V., ADVOCATE )
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF
B.N.S.S., 2023, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C.NO.13525/2025 (ARISING OUT OF PCR NO.5581/2025) AND
ALL CONSEQUENTIAL PROCEEDINGS ARISING THEREFROM,
INSOFAR AS THEY RELATE TO THE PETITIONER (ACCUSED NO.3)
KAVITHA CHOPRA PENDING BEFORE THE HON'BLE XXV A.C.J.M
COURT, AT BENGALURU.
IN CRIMINAL PETITION No.2041 OF 2026
BETWEEN:
KAVITHA CHOPRA
AGED ABOUT 47 YEARS,
DIRECTOR OF OSIA HYPER RETAIL LIMITED,
4D SQUARE BASEMENT ONE,
VISAT TO GANDHINAGAR HIGHWAY,
MOTERA, AHAMEDABAD,
GUJARAT - 380 005.
... PETITIONER
(BY SMT.KEERTHI REDDY, ADVOCATE FOR
SRI MADESH V.M., ADVOCATE )
3
AND:
M/S. 63IDEAS INFOLABS PVT. LTD., (NINJACART)
R/O AT INDIGUBE HELIOS BUSINESS PARK,
TOWER-E, 2ND FLOOR, CHANDANA,
KADUBEESANAHALLI, PANATHUR,
BENGALURU - 560 103.
REPRESENTED BY ITS
ASSISTANT MANAGER
MR.ADARSH R.,
MOB: 9986447908
EMAIL- [email protected]
... RESPONDENT
(BY SRI BHARATH KUMAR V., ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF
B.N.S.S., 2023, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C.NO.13260/2025 (ARISING OUT OF PCR NO.5583/2025) AND
ALL CONSEQUENTIAL PROCEEDINGS ARISING THEREFROM,
INSOFAR AS THEY RELATE TO THE PETITIONER (ACCUSED NO.3)
KAVITHA CHOPRA PENDING BEFORE THE HON'BLE XXV A.C.J.M
COURT AT BENGALURU.
IN CRIMINAL PETITION No.2091 OF 2026
BETWEEN:
KAVITHA CHOPRA
AGED ABOUT 47 YEARS
DIRECTOR OF OSIA HYPER RETAIL LIMITED
4D SQUARE BASEMENT ONE
VISAT TO GANDHINAGAR HIGHWAY
MOTERA, AHAMEDABAD
GUJARAT - 380 005.
... PETITIONER
(BY SMT.KEERTHI REDDY, ADVOCATE FOR
SRI MADESH V.M., ADVOCATE)
4
AND:
M/S. 63IDEAS INFOLABS PVT. LTD., (NINJACART)
R/O. AT INDIGUBE HELIOS BUSINESS PARK
TOWER-E, 2ND FLOOR CHANDANA
KADUBEESANAHALLI, PANATHUR
BENGALURU - 560 103
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
MR.KARTHIKEYA YADAV
MOB: 9986447908
EMAIL [email protected]
... RESPONDENT
(BY SRI BHARATH KUMAR V., ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF
B.N.S.S., 2023, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C.NO.13527/2025 (ARISING OUT OF PCR.NO.5576/2025) AND
ALL CONSEQUENTIAL PROCEEDINGS ARISING THEREFROM,
INSOFAR AS THEY RELATE TO THE PETITIONER (ACCUSED NO.3),
KAVITHA CHOPRA, PENDING BEFORE THE HON'BLE XXV A.C.J.M
COURT, AT BENGALURU.
IN CRIMINAL PETITION No.2797 OF 2026
BETWEEN:
DHIRENDRA CHOPRA
AGED ABOUT 45 YEARS
DIRECTOR OF OSIA HYPER RETAIL LIMITED,
4D SQUARE BASEMENT ONE,
VISAT TO GANDHINAGAR HIGHWAY,
MOTERA, AHAMEDABAD
GUJARAT - 380 005.
... PETITIONER
(BY SMT.KEERTHI REDDY, ADVOCATE FOR
5
SRI MADESH V.M., ADVOCATE)
AND:
M/S. 63IDEAS INFOLABS PVT. LTD., (NINJACART)
R/O. AT, INDIGUBE HELIOS BUSINESS PARK,
TOWER-E, 2ND FLOOR, CHANDANA,
KADUBEESANAHALLI, PANATHUR,
BENGALURU - 560 103
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
MR. KARTHIKEYA YADAV
MOB: 9986447908
EMAIL: [email protected]
... RESPONDENT
(BY SRI BHARATH KUMAR V., ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF
B.N.S.S., 2023, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C. NO. 23539/2025(ARISING OUT OF PCR NO.9712/2025) AND
ALL CONSEQUENTIAL PROCEEDINGS ARISING THEREFROM,
INSOFAR AS THEY RELATE TO THE PETITIONER (ACCUSED NO. 2),
DHIRENDRA CHOPRA PENDING BEFORE THE HON'BLE XXV A.C.J.M
COURT, AT BENGALURU.
IN CRIMINAL PETITION No.2854 OF 2026
BETWEEN:
DHIRENDRA CHOPRA
AGED ABOUT 45 YEARS
DIRECTOR OF OSIA HYPER RETAIL LIMITED,
4D SQUARE BASEMENT ONE,
VISAT TO GANDHINAGAR HIGHWAY,
MOTERA, AHAMEDABAD
GUJARAT - 380 005.
... PETITIONER
(BY SMT.KEERTHI REDDY, ADVOCATE FOR
6
SRI MADESH V.M., ADVOCATE)
AND:
M/S. 63IDEAS INFOLABS PVT. LTD., (NINJACART)
R/O. AT, INDIGUBE HELIOS BUSINESS PARK,
TOWER-E, 2ND FLOOR, CHANDANA,
KADUBEESANAHALLI, PANATHUR,
BENGALURU - 560 103
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
MR. KARTHIKEYA YADAV
MOB:9986447908
EMAIL: [email protected]
... RESPONDENT
(BY SRI BHARATH KUMAR V., ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF
B.N.S.S., 2023, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C.NO.23540/2025 (ARISING OUT OF PCR NO.9707/2025) AND
ALL CONSEQUENTIAL PROCEEDINGS ARISING THEREFROM,
INSOFAR AS THEY RELATE TO THE PETITIONER (ACCUSED NO.3)
DHIRENDRA CHOPRA PENDING BEFORE THE HON'BLE XXV A.C.J.M
COURT, AT BENGALURU.
THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 07.04.2026, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
7
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
Criminal Petitions Nos.1978, 2041 and 2091 of 2026 are
preferred by Kavitha Chopra, accused No.3 and Criminal Petition
Nos. 2797 and 2854 of 2026 are preferred by Dhirendra Chopra,
wherein he is drawn as accused Nos. 2 and 3, respectively. The
complainant in all these cases is common - one M/s 63Ideas
Infolabs Private Limited (Ninjacart). In the light of the facts being
similar in all these cases and the petitioners being husband and wife
and the complainant being the same, I deem it appropriate to
notice the facts narrated in Criminal Petition No.1978 of 2026.
2. Facts, in brief, adumbrated, are as follows: -
The respondent/complainant is a company incorporated under
the provisions of the Companies Act, 2013 and is engaged in the
business of wholesale trade of agricultural products and fresh
produce. One OSIA Hyper Retail Limited, accused No.1/Company,
whose directors are said to be Sri. Dhirendra Chopra and
8
Smt. Kavitha Chopra, enters into a sale and purchase agreement
with the respondent/complainant. Pursuant to the agreement,
accused No.1/Company placed a purchase order for supply of 37
metric tons of loose tuvar dal gili. Thus, goods amounting to
₹50,02,400/-, on the purchase order, were supplied by the
respondent/complainant. In furtherance of the said transaction,
accused No.1/Company issues a cheque amounting to ₹50,00,000/-
in discharge of the liability. The cheque so issued by accused
No.1/Company was dishonoured for want of sufficient funds. A
statutory demand notice was issued by the
respondent/complainant. The accused did not respond to the said
notice; this led the respondent/complainant to invoke Section 223
of the BNSS by registering a private complaint for the offence
punishable under Section 138 of the Negotiable Instruments Act,
1881 ('the Act' for short). The concerned Court records sworn
statement of the respondent/complainant. Five different complaint
cases are registered with regard to five different instruments and
transactions. Recording of sworn statement, registration of
complaint cases and issuance of summons is what has driven the
petitioners to this Court in the subject petitions.
9
3. Heard Smt. Keerthi Reddy, learned counsel appearing for
the petitioners and Sri V. Bharath Kumar, learned counsel
appearing for the respondent.
SUBMISSIONS:
PETITONER:
4. The learned counsel Smt. Keerthi Reddy appearing for the
petitioners would vehemently contend that the entire transaction is
between accused No.1/Company and the respondent/complainant.
Accused No.2/Dhirendra Chopra is the authorized signatory of
accused No.1/Company and the cheques are signed by him.
Smt. Kavitha Chopra is only one of the Directors and she is not
involved in the day to-day affairs of the Company. She is not a
signatory to the cheques. The complaint does not contain any
averment regarding who has issued cheques and who has signed
the cheques. There is no material to show Smt. Kavitha Chopra
had knowledge of the alleged transaction between the Company
and the complainant. The alleged transaction sprang from an
agreement which is signed by one Archana Nagrani who is not even
a Director in the Company anymore. The complaint is required to
10
allege that the person who is sought to be held liable vicariously
was in-charge of and responsible for the affairs of the Company at
the time when the alleged offence was committed. The twin
requirements under Section 141 of the Act is not satisfied in the
case at hand. Merely naming a person as a Director in the array of
accused is not sufficient to fasten liability under Section 138 r/w
141 of the Act. Identical submissions are made with regard to
Dhirendra Chopra as well, in contending that he is not the signatory
to few of the cheques and there is no averment in the complaint
with regard to the role and responsibility of Dhirendra Chopra. The
learned counsel would again take this Court through the averments
in the complaint to demonstrate that there is no indication as to
who has issued the cheques. There is no allegation made against
Dhirendra Chopra as well. In the absence of necessary averments,
proceedings cannot continue against the husband/Dhirendra Chopra
also.
RESPONDENT:
5. Contrariwise, the learned counsel Sri V. Bharath Kumar
appearing for the complainant, in all these cases, would contend
11
that agreement is entered into between the complainant and
accused No.1/Company through its authorized signatories who are
the husband - Dhirendra Chopra and wife - Kavitha Chopra and
key managerial personnel of the Company. He would take this
Court through the GST certificate, the Board resolution and all other
contemporaneous documents to demonstrate that both Dhirendra
Chopra and Kavitha Chopra are authorized representatives of
accused No.1/Company. He would further contend that the grounds
that are urged by the petitioners or the submissions will all have to
be tested in evidence and the jurisdiction under Section 528 of
BNSS should not be exercised in such cases. He would seek
dismissal of the petitions.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
CONSIDERATION:
7. The afore-narrated transaction between the parties is a
matter of record. What triggers the complainant to invoke the
12
jurisdiction of the learned Magistrate under Section 223 of the
BNSS is the transactions between the respondent/complainant and
accused No.1/Company, in furtherance of which cheques are issued
and dishonoured. Therefore, it would suffice if the consideration
would begin from noticing the complaint in one of these petitions.
The complaint in Criminal Petition No.1978 of 2026 reads as
follows:
"Complaint Filed Under Section 223 of The Bharatiya
Nagarik Suraksha Sanhita 2023 r/w Section 138 of
Negotiable Instruments Act
The complainant above named submits as follows:-
1. The address of the parties to the complaint is referred as
above for the purposes of service of process from this Hon'ble
court. It may also be served upon the complainant's counsel
Sri.C.H.Doddegowda Advocate, Lawkarft Legal Network, 1st
Floor, MM Building, 38, Rajaram Mohanroy Road, Next to House
of Johnson Tiles, Sampangirama Nagar, Bengaluru -560027,
Mob:9632717959, Email:[email protected].
2. The complainant submits since the complainant is a company
incorporated under the Companies Act 2013 and engaged in the
business of wholesale trade and agricultural products and fresh
produce supply like vegetables, fruits, milk etc., throughout
India having its registered office at the above mentioned
address and the company is represented by its assistant
manager. The copy of the certificate of incorporation and board
resolution issued by company is herewith produced as
Document No.1 & 2.
3. The complainant submits that the accused no.1 is the
company and accused no.2 and 3 are its directors entered
an agreement by name sale & purchase agreement with
13
the complainant dated 19.04.2024 for the purpose of
smooth business transaction between complainant and
accused. The scan copy of the said agreement sent
through email is herewith produced as Document No.3.
4. The complainant submits that based on the agreement the
accused has placed order before the complainant for supply of
37 Metric Tons of Loose Tuvar Daal Gili, accordingly the
complainant has supplied the above said purchase order issued
by the accused under the invoice bearing no.AF-BOS-00706 &
AF-BOS-00707 dated 01.01.2025.......
worth sum of Rs.50,02,400/- (fifty lakhs two thousand four
hundred only) and the same is payable on or before the due
date as mentioned under the invoices, it is further submitted
that the late payment will be charged interest as mentioned
under the invoice. The office copies of 2 invoices are herewith
produced as Document No.4.
5. The complainant submits that the accused has assured to pay
the invoice amount within the due date, later he has failed to
make payment at this juncture the complainant has requested
the accused many times to clear the outstanding due owned by
the accused but the accused has failed to make payment, after
repeated requests and demands made by the complainant to
clear the outstanding dues accused has instructed to present the
post dated cheque issued by him bearing Cheque no.293084
dated 04.03.2025 for a Rs.50,00,000/-. (fifty lakhs only) drawn
on Punjab National Bank, Shahibagh, Ahmedabad, Gujarat in
favor complainant including the interest and late fee for
payment towards the discharge of the part payment debt or
liability owned by him. The said cheque is herewith produced as
Document No.5.
6. The complainant submits that based on the instructions of the
accused the complainant has presented the said cheque for
realization through his banker Standard Charted bank Ltd.,
Koramangala Branch, Bengaluru for a sum of Rs.50,00,000/-
(fifty lakhs only) for realization, but to the utter shock and
dismay the said cheque returned un-realized with an
endorsement that "Funds Insufficient". The same was
communicated to complainant by his bankers by a memo dated
14
05.03.2025. The endorsement is produced herewith and marked
as Document No.6.
7. The complainant submits that pursuance to such dishonor of
the cheque issued by the accused, the complainant has issued
demand notice to the accused as contemplated under the
provisions of section 138 (B) of NI Act by way of Registered post
dated 27.03.2025. The notice issued to accused persons is duly
served on the accused on 01.04.2025, even after the service of
the demand no accused not preferred to make payment nor
issued reply for the same. The office copy of the demand notice,
Postal receipts and online postal tracking in EK897423409IN,
EK897423390IN and EK897423372IN is herewith produced as
Document No.7, 8 & 9.
8. The complainant submits that, the accused having been
issuing the cheque referred above to discharge the debt that
was payable by him has not taken proper steps for its
realization and even he has not taken any steps after the receipt
of the demand notice hence the accused has violated the
provisions of law thereby rendering himself liable to be
prosecuted for the offences under Section 138 of NI Act.
9. The complainant submits that since the accused has issued
cheque referred above during the course of business
transaction, after acknowledgement of the receipt of the good,
the accused not came forward to make any payment this act of
the accused is clearly shows his ulterior motive to cheat us and
suffer the us huge financial loss.
10. It is submitted that the accused has however failed to keep
up his undertaking thereby rendering himself liable to be
prosecuted under the provisions of the NI Act. Hence this
complaint.
11. The complainant further states that:
a) The cheque was issued on 04.03.2025
b) Intimation of dishonor is dated 05.03.2025
c) Legal notice was issued on 27.03.2025
15
d) Legal notice served on 01.04.2025
e) 45 days from the date of service of demand notice
16.05.2025
f) Date of filing of the complainant 19.04.2025
12. The complainant submits that, the offence having been
committed within the jurisdiction of this court, hence this
Hon'ble court has jurisdiction to try this case.
13. The complainant submits that the cause of action having
arisen on 16.04.2025 when the statutory period of 15 days is
being expired. The complainant has filed this complaint within
the period of limitation.
PRAYER
WHEREFORE, the complainant respectfully prays that this
Hon'ble court be pleased to:
a. To take this complaint on record and issue process to the
accused and deal with him in accordance with law.
b. And award the compensation of the amount twice the
amount of the cheque referred above, which would meet the
interest of justice and equity."
(sic)
All other complaints are verbatim similar in allegation. Sworn
statement of the complainant is recorded by way of an affidavit.
One such affidavit reads as follows:
"IN THE COURT OF XXVTH ADDL. CHIEF JUDICIAL
MAGISTRATE AT BENGALURU
C.C.No. 13525 / 2025
BETWEEN:
16
M/s.63Ideas Infolabs pvt.Ltd (Ninjacart)
Rep. by its Director
Mr.Karthikeya Yadav
... Complainant.
AND:
OSIA Hyper Retail Limited
& others
... Accused.
SWORN STATEMENT BY WAY OF AFFIDAVIT
I, Mr.Karthikeya Yadav, S/o.R.S.Yadav, Aged about 37
years, Director Anchor Finance of M/s.63Ideas Infolabs pvt.Ltd
(Ninjacart) office at Indiqube Helios Business Park, Tower-E, 2nd
Floor, Chandana, Kadubeesanahalli, Panathur, Bengaluru -
560103, do hereby solemnly affirms and states oath as fallows.
1. I state that I am the complainant herein as such I am
well conversant with the facts of the case, hence I am swearing
to the contents of this affidavit.
2. I state that complainant is a company incorporated under
the Companies Act 2013 and engaged in the business of
wholesale trade and agricultural products and fresh produce
supply like vegetables, fruits, milk etc., throughout India having
its registered office at the above mentioned address and the
company is represented by me its Director. The copy of the
certificate of incorporation and board resolution issued by
company is herewith produced as Exhibit P.1 & 2.
3. I state that accused no.1 is the company and
accused no.2 and 3 are its directors entered an
agreement by name sale & purchase agreement with us
dated 19.04.2024 for the purpose of smooth business
transaction between complainant and accused. The scan
copy of the said agreement sent through email is
herewith produced as Exhibit Р.3.
4. I state that based on the agreement the accused has
placed order before us for supply of 37 Metric Tons of Loose
17
Tuvar Daal Gili accordingly we have supplied the above said
purchase order issued by the accused under the invoice bearing
no.AF-BOS-00706 & AF-BOS-00707 dated 01.01.2025 to
26.12.2024 worth sum of Rs.50,02,400/-(fifty lakhs two
thousand four hundred only) and the same is payable on or
before the due date as mentioned under the invoices, it is
further submitted that the late payment will be charged interest
as mentioned under the invoice. The office copies of 2 invoices
are herewith produced as Exhibit P.4.
5. I state that accused has assured to pay the invoice
amount within the due date, later he has failed to make
payment at this juncture we have requested the accused many
times to clear the outstanding due owned by the accused but
the accused has failed to make payment, after repeated
requests and demands made by us to clear the outstanding
dues accused has instructed to present the post dated cheque
issued by him bearing Cheque no.293084 dated 04.03.2025 for
a Rs.50,00,000/- (fifty lakhs only) drawn on Punjab National
Bank, Shahibagh, Ahmedabad, Gujarat in favor complainant
including the interest and late fee for payment towards the
discharge of the part payment debt or liability owned by him.
The said cheque is herewith produced as Exhibit P.5.
6. I state that based on the instructions of the accused we
have presented the said cheque for realization through his
banker Standard Charted bank Ltd., Koramangala Branch,
Bengaluru for a sum of Rs.50,00,000/- (fifty lakhs only) for
realization, but to the utter shock and dismay the said cheque
returned un-realized with an endorsement that "Funds
Insufficient". The same was communicated to us by a memo
dated 05.03.2025. The endorsement is produced herewith and
marked as Exhibit P.6.
7. I state that pursuance to such dishonor of the cheque
issued by the accused we have issued demand notice to the
accused as contemplated under the provisions of section 138
(B) of NI Act by way of Registered post dated 27.03.2025. The
notice issued to accused persons is duly served on the accused
on 01.04.2025, even after the service of the demand notice
accused not preferred to make payment nor issued reply for the
same. The office copy of the demand notice, Postal receipts and
18
online postal tracking in EK897423409IN, EK897423390IN and
EK897423372IN is herewith produced as Exhibit P.7, 8 & 9.
8. I state that the accused having been issued the cheque
referred above to discharge of the debt that was payable by him
has not taken proper steps for its realization, and even he has
not taken any steps after the service of the demand notice
hence the accused has violated the provisions of law thereby
rendering himself liable to be prosecuted for the offences under
Section 138 of NI Act.
9. I state that since the accused has issued signed cheque
referred above during the course of business transaction, after
acknowledgement of the receipt of the good, the accused not
came forward to make any payment, this act of the accused is
clearly shows his ulterior motive to cheat us and suffer the us
huge financial loss.
Therefore it is respectfully prays that this Hon'ble court be
pleased to take cognizance of the office, hold trial and punish
the accused maximum punishment prescribed under the law and
also award the compensation in terms of twice the amount of
the Cheque imposing interest thereon, which would meet the
interest of justice.
What is stated above is true and correct to the best of my
knowledge, information and belief.
Identified by me
Sd/- Sd/-
Advocate Deponent
Bengaluru
Date: 19.01.2026
Sd/-
SWORN BEFORE ME"
(sic)
(Emphasis added at each instance)
19
A perusal at the complaint or the sworn statement so recorded
admittedly does not indicate the role of any of the Directors in
accused No.1/Company. The sale purchase agreement no doubt is
signed by both the husband and the wife and other Directors. The
cheques are issued in the name of accused No.1/Company and the
signatures on the cheques are that of the wife in a few cases and
that of the husband in a few cases and in one case of joint account,
both of them have signed the cheque. Smt. Kavitha Chopra and Sri.
Dhirendra Chopra are included as guarantors in the supply purchase
agreement that was entered between the Company and the
complainant.
8. The averment in the complaint is that both the husband
and wife are Directors of accused No.1/Company and had entered
into the said agreement with the complainant. There is no specific
averment in the complaint with regard to the role of both the
petitioners in the day-to-day affairs of the Company, much less the
role of the wife in the affairs of the Company. Information that is
received from the Registrar, Ministry of Corporate Affairs website,
which is appended to the petition is indicative of the fact that
20
Sri Dhirendra Chopra is the Managing Director and Smt. Kavitha
Chopra is the Director. The cheque that forms the subject matter of
Criminal Petition No.2797 of 2026 was issued from the joint account
of Smt. Kavitha Chopra and Sri Dhirendra Chopra. The Company is
not an accused in this petition. With all this conundrum the issue
that false for consideration would be, whether the wife Smt Kavitha
Chopra who is shown as Director can be drawn into the web of
proceedings.
9. Jurisprudence is replete with the law laid down by the Apex
Court interpreting Sections 138 and 141 of the Act.
9.1. The Apex Court in the case of SUSELA PADMAVATHY
AMMA v. BHARTI AIRTEL LIMITED1, has held as follows:
".... .... ....
16. In State of Haryana v. Brij Lal Mittal [State of
Haryana v. Brij Lal Mittal, (1998) 5 SCC 343 : 1998 SCC (Cri)
1315 : (1998) 93 Comp Cas 329] , this Court observed thus:
(SCC pp. 347-48, para 8)
"8. Nonetheless, we find that the impugned
judgment of the High Court has got to be upheld for an
altogether different reason. Admittedly, the three
respondents were being prosecuted as Directors of the
manufacturers with the aid of Section 34(1) of the Act
which reads as under:
1
(2024) 12 SCC 131
21
'34. Offences by companies.--(1) Where
an offence under this Act has been committed
by a company, every person who at the time
the offence was committed, was in charge of,
and was responsible to the company for the
conduct of the business of the company, as
well as the company shall be deemed to be
guilty of the offence and shall be liable to be
proceeded against and punished accordingly:
Provided that nothing contained in this
sub-section shall render any such person liable
to any punishment provided in this Act if he
proves that the offence was committed without
his knowledge or that he exercised all due
diligence to prevent the commission of such
offence.'
It is thus seen that the vicarious liability of
a person for being prosecuted for an offence
committed under the Act by a company arises if at
the material time he was in charge of and was also
responsible to the company for the conduct of its
business. Simply because a person is a Director of
the company it does not necessarily mean that he
fulfils both the above requirements so as to make
him liable. Conversely, without being a Director a
person can be in charge of and responsible to the
company for the conduct of its business. From the
complaint in question we, however, find that
except a bald statement that the respondents
were Directors of the manufacturers, there is no
other allegation to indicate, even prima facie, that
they were in charge of the company and also
responsible to the company for the conduct of its
business."
17. It could thus be seen that this Court had held
that simply because a person is a Director of the
company, it does not necessarily mean that he fulfils the
twin requirements of Section 34(1) of the said Act so as
to make him liable. It has been held that a person cannot
be made liable unless, at the material time, he was in
charge of and was also responsible to the company for
the conduct of its business.
22
18. In S.M.S. Pharmaceuticals Ltd. [S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 :
2005 SCC (Cri) 1975 : (2005) 127 Comp Cas 563] , this
Court was considering the question as to whether it was
sufficient to make the person liable for being a Director of
a company under Section 141 of the Negotiable
Instruments Act, 1881. This Court considered the
definition of the word "Director" as defined in Section
2(13) of the Companies Act, 1956. This Court observed
thus: (SCC pp. 97-98, para 8)
"8. ... There is nothing which suggests that
simply by being a Director in a company, one is
supposed to discharge particular functions on
behalf of a company. It happens that a person may
be a Director in a company but he may not know
anything about the day-to-day functioning of the
company. As a Director he may be attending meetings
of the Board of Directors of the company where usually
they decide policy matters and guide the course of
business of a company. It may be that a Board of
Directors may appoint sub-committees consisting of one
or two Directors out of the Board of the company who
may be made responsible for the day-to-day functions of
the company. These are matters which form part of
resolutions of the Board of Directors of a company.
Nothing is oral. What emerges from this is that the
role of a Director in a company is a question of fact
depending on the peculiar facts in each case.
There is no universal rule that a Director of a
company is in charge of its everyday affairs. We
have discussed about the position of a Director in
a company in order to illustrate the point that
there is no magic as such in a particular word, be
it Director, Manager or Secretary. It all depends
upon the respective roles assigned to the officers
in a company."
19. It was held that merely because a person is a
Director of a company, it is not necessary that he is
aware about the day-to-day functioning of the company.
This Court held that there is no universal rule that a
Director of a company is in charge of its everyday affairs.
It was, therefore, necessary, to aver as to how the
Director of the company was in charge of day-to-day
23
affairs of the company or responsible for the affairs of the
company. This Court, however, clarified that the position
of a Managing Director or a Joint Managing Director in a
company may be different. This Court further held that
these persons, as the designation of their office suggests,
are in charge of a company and are responsible for the
conduct of the business of the company. To escape
liability, they will have to prove that when the offence
was committed, they had no knowledge of the offence or
that they exercised all due diligence to prevent the
commission of the offence.
20. In Pooja Ravinder Devidasani v. State of
Maharashtra [Pooja Ravinder Devidasani v. State of
Maharashtra, (2014) 16 SCC 1 : (2015) 3 SCC (Civ) 384 :
(2015) 3 SCC (Cri) 378 : (2015) 190 Comp Cas 106] this Court
observed thus: (SCC pp. 9-10, paras 17-21)
"17. ... Every person connected with the
Company will not fall into the ambit of the
provision. Time and again, it has been asserted by
this Court that only those persons who were in
charge of and responsible for the conduct of the
business of the Company at the time of
commission of an offence will be liable for criminal
action. A Director, who was not in charge of and
was not responsible for the conduct of the
business of the Company at the relevant time, will
not be liable for an offence under Section 141 of
the NI Act. In National Small Industries
Corpn. [National Small Industries Corpn.
Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 :
(2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113 :
(2010) 154 Comp Cas 313] this Court observed:
(SCC p. 336, paras 13-14)
'13. Section 141 is a penal provision
creating vicarious liability, and which, as
per settled law, must be strictly
construed. It is therefore, not sufficient to
make a bald cursory statement in a
complaint that the Director (arrayed as an
accused) is in charge of and responsible
to the company for the conduct of the
business of the company without anything
more as to the role of the Director. But
24
the complaint should spell out as to how
and in what manner Respondent 1 was in
charge of or was responsible to the
accused Company for the conduct of its
business. This is in consonance with strict
interpretation of penal statutes,
especially, where such statutes create
vicarious liability.
14. A company may have a number of
Directors and to make any or all the Directors
as accused in a complaint merely on the basis
of a statement that they are in charge of and
responsible for the conduct of the business of
the company without anything more is not a
sufficient or adequate fulfilment of the
requirements under Section 141.'
18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari
Lal Gupta v. D.H. Mehta, (1971) 3 SCC 189 : 1971 SCC
(Cri) 279] , this Court observed that a person "in charge
of a business" means that the person should be in
overall control of the day-to-day business of the
Company.
19. A Director of a company is liable to be
convicted for an offence committed by the
company if he/she was in charge of and was
responsible to the company for the conduct of its
business or if it is proved that the offence was
committed with the consent or connivance of, or
was attributable to any negligence on the part of
the Director concerned (see State of
Karnataka v. Pratap Chand [State of
Karnataka v. Pratap Chand, (1981) 2 SCC 335 :
1981 SCC (Cri) 453 : (1981) 51 Comp Cas 198] ).
20. In other words, the law laid down by
this Court is that for making a Director of a
company liable for the offences committed by the
company under Section 141 of the NI Act, there
must be specific averments against the Director
showing as to how and in what manner the
Director was responsible for the conduct of the
business of the company.
21. In Sabitha Ramamurthy v. R.B.S.
Channabasavaradhya [Sabitha Ramamurthy v. R.B.S.
Channabasavaradhya, (2006) 10 SCC 581 : (2007) 1
25
SCC (Cri) 621 : (2006) 133 Comp Cas 680] , it was held
by this Court that: (SCC pp. 584-85, para 7)
'7. ... it is not necessary for the
complainant to specifically reproduce the
wordings of the section but what is required is
a clear statement of fact so as to enable the
court to arrive at a prima facie opinion that the
accused are vicariously liable. Section 141
raises a legal fiction. By reason of the said
provision, a person although is not
personally liable for commission of such
an offence would be vicariously liable
therefor. Such vicarious liability can be
inferred so far as a company registered or
incorporated under the Companies Act,
1956 is concerned only if the requisite
statements, which are required to be
averred in the complaint petition, are
made so as to make the accused therein
vicariously liable for the offence
committed by the company.'
By verbatim reproducing the words of the section
without a clear statement of fact supported by proper
evidence, so as to make the accused vicariously liable, is
a ground for quashing proceedings initiated against such
person under Section 141 of the NI Act."
(emphasis in original)
21. It could thus clearly be seen that this Court has
held that merely reproducing the words of the section
without a clear statement of fact as to how and in what
manner a Director of the company was responsible for
the conduct of the business of the company, would not
ipso facto make the Director vicariously liable.
22. A similar view has previously been taken by this
Court in K.K. Ahuja v. V.K. Vora [K.K. Ahuja v. V.K. Vora,
(2009) 10 SCC 48 : (2009) 4 SCC (Civ) 1 : (2010) 2 SCC (Cri)
1181 : (2009) 152 Comp Cas 520] .
23. In State (NCT of Delhi) v. Rajiv Khurana [State (NCT
of Delhi) v. Rajiv Khurana, (2010) 11 SCC 469 : (2011) 1 SCC
(Cri) 195 : (2010) 158 Comp Cas 151] , this Court reiterated
the position thus: (SCC p. 474, para 17)
26
"17. The ratio of all these cases is that the
complainant is required to state in the complaint
how a Director who is sought to be made an
accused, was in charge of the business of the
company or responsible for the conduct of the
company's business. Every Director need not be
and is not in charge of the business of the
company. If that is the position with regard to a
Director, it is needless to emphasise that in the
case of non-Director officers, it is all the more
necessary to state what were his duties and
responsibilities in the conduct of business of the
company and how and in what manner he is
responsible or liable."
24. In Ashoke Mal Bafna [Ashoke Mal Bafna v. Upper
India Steel Mfg. &Engg. Co. Ltd., (2018) 14 SCC 202 : (2019) 1
SCC (Cri) 568 : (2018) 4 SCC (Civ) 515] , this Court observed
thus: (SCC p. 206, paras 9-10)
"9. To fasten vicarious liability under Section
141 of the Act on a person, the law is well settled
by this Court in a catena of cases that the
complainant should specifically show as to how
and in what manner the accused was responsible.
Simply because a person is a Director of a
defaulter Company, does not make him liable
under the Act. Time and again, it has been
asserted by this Court that only the person who
was at the helm of affairs of the Company and in
charge of and responsible for the conduct of the
business at the time of commission of an
offence will be liable for criminal action.
(See Pooja Ravinder Devidasani v. State of
Maharashtra [Pooja Ravinder Devidasani v. State
of Maharashtra, (2014) 16 SCC 1 : (2015) 3 SCC
(Civ) 384 : (2015) 3 SCC (Cri) 378 : (2015) 190
Comp Cas 106] .)
10. In other words, the law laid down by
this Court is that for making a Director of a
Company liable for the offences committed by the
Company under Section 141 of the Act, there must
be specific averments against the Director
showing as to how and in what manner the
27
Director was responsible for the conduct of the
business of the Company."
25. A similar view has been taken by this Court
in Lalankumar Singh v. State of Maharashtra [Lalankumar
Singh v. State of Maharashtra, 2022 SCC OnLine SC 1383] to
which one of us (B.R. Gavai, J.) was a party.
26. In the light of this settled legal position, let us
examine the averments made in the complaints.
27. It will be relevant to refer to Para 16 of the complaint
bearing No. CC 3151 of 2017 filed by the respondent before the
Court of XVIII Metropolitan Magistrate, Saidapet, Chennai dated
30-11-2016, which reads thus:
"16. The complainant states that the accused has
an intention of cheating the complainant. The 2nd and
3rd accused herein has no intention to pay the dues that
they owe to the complainant. Instead, making the
complainant believe that the same would be paid and
through which trying to push the liability to future. It is
also pertinent to note that the 2nd and 3rd of the
accused herein are the Directors, promoters of the 1st
accused being the Company. The 2nd of the accused
herein is the authorised signatory, who is in charge of
and responsible for the day-to-day affairs of the
Company, the 1st accused."
28. It can thus be seen that the only allegation against
the present appellant is that the present appellant and Accused
2 had no intention to pay the dues that they owe to the
complainant. It is stated that the 2nd accused and the 3rd
accused (appellant herein) are the Directors, promoters
of the 1st accused being the Company. It is further
averred that the 2nd accused is the authorised signatory,
who is in charge of and responsible for the day-to-day
affairs of the Company i.e. the 1st accused.
29. It can thus be clearly seen that there is no
averment to the effect that the present appellant is in
charge of and responsible for the day-to-day affairs of the
Company. It is also not the case of the respondent that
28
the appellant is either the Managing Director or the Joint
Managing Director of the Company.
30. It can thus clearly be seen that the averments
made are not sufficient to invoke the provisions of
Section 141 of the NI Act qua the appellant.
31. In the result, we find that the present appeals
deserve to be allowed. It is ordered accordingly. The judgment
and order passed by the High Court dated 26-4-2022 [Susela
Padmavathy Amma v. Bharti Airtel Ltd., 2022 SCC OnLine Mad
9023] is quashed and set aside. The proceedings in CCs Nos.
3151 and 3150 of 2017 on the file of learned XVIII Metropolitan
Magistrate, Saidapet, Chennai (now transferred to the learned
Metropolitan Magistrate, Fast Track Court III, Saidapet,
Chennai) in connection with the offence punishable under
Section 138 read with Section 142 of the NI Act are quashed
and set aside qua the present appellant."
The Apex Court holds that merely being a Director of the company
would not render him or her liable for the offence under Section
138 of the Act. Vicarious liability cannot be fastened on the Director
of a company by merely reproducing the words in Section 141 of
the Act, without clearly averring as to how the Director was
responsible for the affairs of the company.
29
9.2. The Apex Court in the case of K.S. MEHTA v. MORGAN
SECURITIES AND CREDITS PRIVATE LIMITED2 has held as
follows:
".... .... ....
Analysis and findings
15. This Court has consistently held that non-executive
and independent Director(s) cannot be held liable under Section
138 read with Section 141 of the NI Act unless specific
allegations demonstrate their direct involvement in affairs of the
company at the relevant time.
16. This Court in National Small Industries Corpn.
Ltd. v. Harmeet Singh Paintal [National Small Industries Corpn.
Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1
SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113 : (2010) 154 Comp
Cas 313] observed: (SCC pp. 336, 338-39 & 345-46, paras 13,
22 & 39)
"13. Section 141 is a penal provision
creating vicarious liability, and which, as per
settled law, must be strictly construed. It is
therefore, not sufficient to make a bald cursory
statement in a complaint that the Director
(arrayed as an accused) is in charge of and
responsible to the company for the conduct of the
business of the company without anything more as
to the role of the Director. But the complaint
should spell out as to how and in what manner
Respondent 1 was in charge of or was responsible
to the accused Company for the conduct of its
business. This is in consonance with strict
interpretation of penal statutes, especially, where
such statutes create vicarious liability.
***
22. Therefore, this Court has distinguished the
case of persons who are in charge of and responsible for
2
(2025) 7 SCC 615
30
the conduct of the business of the company at the time
of the offence and the persons who are merely holding
the post in a company and are not in charge of and
responsible for the conduct of the business of the
company. Further, in order to fasten the vicarious
liability in accordance with Section 141, the
averment as to the role of the Directors concerned
should be specific. The description should be clear
and there should be some unambiguous
allegations as to how the Directors concerned
were alleged to be in charge of and were
responsible for the conduct and affairs of the
company.
***
39. From the above discussion, the following
principles emerge:
(i) The primary responsibility is on the complainant
to make specific averments as are required under
the law in the complaint so as to make the
accused vicariously liable. For fastening the
criminal liability, there is no presumption that
every Director knows about the transaction.
(ii) Section 141 does not make all the Directors
liable for the offence. The criminal liability
can be fastened only on those who, at the
time of the commission of the offence, were
in charge of and were responsible for the
conduct of the business of the company.
(iii) Vicarious liability can be inferred against a
company registered or incorporated under
the Companies Act, 1956 only if the
requisite statements, which are required to
be averred in the complaint/petition, are
made so as to make the accused therein
vicariously liable for the offence committed
by the company along with averments in the
petition containing that the accused were in
charge of and responsible for the business
of the company and by virtue of their
position they are liable to be proceeded
with.
31
(iv) Vicarious liability on the part of a person
must be pleaded and proved and not
inferred.
(v) If the accused is a Managing Director or a
Joint Managing Director then it is not
necessary to make specific averment in the
complaint and by virtue of their position
they are liable to be proceeded with.
(vi) If the accused is a Director or an officer of a
company who signed the cheques on behalf
of the company then also it is not necessary
to make specific averment in the complaint.
(vii) The person sought to be made liable should be in
charge of and responsible for the conduct of the
business of the company at the relevant time.
This has to be averred as a fact as there is no
deemed liability of a Director in such cases."
(emphasis in original)
17. In N.K. Wahi v. Shekhar Singh [N.K.
Wahi v. Shekhar Singh, (2007) 9 SCC 481: (2007) 3 SCC
(Cri) 203: (2007) 137 Comp Cas 939] this Court in para 8
observed: (SCC p. 483)
"8. To launch a prosecution, therefore,
against the alleged Directors there must be a
specific allegation in the complaint as to the part
played by them in the transaction. There should be
clear and unambiguous allegation as to how the
Directors are in-charge and responsible for the
conduct of the business of the company. The
description should be clear. It is true that precise
words from the provisions of the Act need not be
reproduced and the court can always come to a
conclusion in the facts of each case. But still, in
the absence of any averment or specific evidence
the net result would be that complaint would not
be entertainable."
18. In S.M.S. Pharmaceuticals Ltd. v. Neeta
Bhalla [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla,
(2005) 8 SCC 89 : 2005 SCC (Cri) 1975 : (2005) 127
32
Comp Cas 563] , this Court laid down that mere
designation as a Director is not sufficient; specific role
and responsibility must be established in the complaint.
19. In Pooja Ravinder Devidasani v. State of
Maharashtra [Pooja Ravinder Devidasani v. State of
Maharashtra, (2014) 16 SCC 1 : (2015) 3 SCC (Civ) 384 :
(2015) 3 SCC (Cri) 378 : (2015) 190 Comp Cas 106] , this
Court while taking into consideration that a non-
executive Director plays a governance role, they are not
involved in the daily operations or financial management
of the company, held that to attract liability under Section
141 of the NI Act, the accused must have been actively in
charge of the company's business at the relevant time.
Mere Directorship does not create automatic liability
under the Act. The law has consistently held that only
those who are responsible for the day-to-day conduct of
business can be held accountable.
20. In Ashok Shewakramani v. State of A.P. [Ashok
Shewakramani v. State of A.P., (2023) 8 SCC 473 : (2023) 4
SCC (Civ) 116 : (2023) 3 SCC (Cri) 568 : (2024) 243 Comp Cas
310] , this Court held: (SCC p. 478, para 20)
"20. After having considered the submissions, we
are of the view that there is non-compliance on the part
of the second respondent with the requirements of sub-
section (1) of Section 141 of the NI Act. We may note
here that we are dealing with the appellants who have
been alleged to be the Directors of Accused 1 company.
We are not dealing with the cases of a Managing
Director or a whole-time Director. The appellants have
not signed the cheques. In the facts of these three
cases, the cheques have been signed by the Managing
Director and not by any of the appellants."
21. In Hitesh Verma v. Health Care at Home (India) (P)
Ltd. [Hitesh Verma v. Health Care at Home (India) (P) Ltd.,
(2025) 7 SCC 623] , this Court held: (SCC paras 3-4)
"3. As the appellant is not a signatory to the
cheque, he is not liable under Section 138 of the 1881
Act. As it is only the signatory to the cheque is liable
under Section 138, unless the case is brought within the
33
four corners of Section 141 of the 1881 Act, no other
person can be held liable. ...
4. There are twin requirements under sub-
section (1) of Section 141 of the 1881 Act. In the
complaint, it must be alleged that the person, who
is sought to be held liable by virtue of vicarious
liability, at the time when the offence was
committed, was in charge of, and was responsible
to the company for the conduct of the business of
the company. A Director who is in charge of the
company and a Director who was responsible to
the company for the conduct of the business, are
two different aspects. The requirement of law is
that both the ingredients of sub-section (1) of
Section 141 of the 1881 Act must be incorporated
in the complaint. Admittedly, there is no assertion
in the complaints that the appellant, at the time of
the commission of the offence, was in charge of
the business of the company. Therefore, on a plain
reading of the complaints, the appellant cannot be
prosecuted with the aid of sub-section (1) of
Section 141 of the 1881 Act."
22. Upon perusal of the record and submissions of
the parties, it is evident that the appellant(s) neither
issued nor signed the dishonoured cheques, nor had any
role in their execution. There is no material on record to
suggest that they were responsible for the issuance of
the cheques in question. Their involvement in the
company's affairs was purely non-executive, confined to
governance oversight, and did not extend to financial
decision-making or operational management.
23. The complaint lacks specific averments that
establish a direct nexus between the appellant(s) and the
financial transactions in question or demonstrate their
involvement in the company's financial affairs.
Additionally, the CGR(s) and RoC records unequivocally
confirm their non-executive status, underscoring their
limited role in governance without any executive
decision-making authority. The mere fact that the
appellant(s) attended Board meetings does not suffice to
impose financial liability on the appellant(s), as such
34
attendance does not automatically translate into control
over financial operations."
The Apex Court holds that complaint lacking in specific averment to
establish a direct nexus between the appellant therein to the
financial transaction in question, financial liability cannot be
fastened automatically or the mere fact that the appellant attended
Board meeting does not suffice to impose financial liability upon the
appellant therein.
9.3. The Apex Court in HDFC BANK LIMITED v. STATE OF
MAHARASHTRA3 has held as follows:
".... .... ....
23. The following principles are deducible from the
said judgment in S.M.S. Pharmaceuticals (1) [S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89:
2005 SCC (Cri) 1975 (2005) 127 Comp Cas 563]:
23.1. "Section 141 contains conditions which have
to be satisfied before the liability can be extended to
officers of a company. Since the provision creates
criminal liability, the conditions have to be strictly
complied with. The conditions are intended to ensure that
a person who is sought to be made vicariously liable for
an offence of which the principal accused is the company,
had a role to play in relation to the incriminating act and
further that such a person should know what is attributed
to him to make him liable." (See para 4)
3
(2025) 9 SCC 653
35
23.2. "There is nothing which suggests that simply
by being a Director in a company, one is supposed to
discharge particular functions on behalf of a company. It
happens that a person may be a Director in a company
but he may not know anything about the day-to-day
functioning of the company. As a Director he may be
attending meetings of the Board of Directors of the
company where usually they decide policy matters and
guide the course of business of a company. It may be that
a Board of Directors may appoint sub-committees
consisting of one or two Directors out of the Board of the
company who may be made responsible for the day-to-
day functions of the company. These are matters which
form part of resolutions of the Board of Directors of a
company. Nothing is oral. What emerges from this is that
the role of a Director in a company is a question of fact
depending upon the peculiar facts in each case. There is
no universal rule that a Director of a company is in
charge of its everyday affairs." (See para 8)
23.3. "Mere use of a particular designation of an
officer without more, may not be enough by way of an
averment in a complaint. When the requirement in
Section 141, which extends the liability to officers of the
company, is that such a person should be in charge of and
responsible to the company for conduct of business of the
company, how can a person be subjected to liability of
criminal prosecution without it being averred in the
complaint that satisfies those requirements. Not every
person connected with a company is made liable under
Section 141. Liability is cast on persons who may have
something to do with the transaction complained of. A
person who is in charge of and responsible for conduct of
business of a company would naturally know why the
cheque in question was issued and why it got
dishonoured." (See Para 8)
23.4. "What is required is that the persons who are
sought to be made criminally liable under Section 141
should be, at the time the offence was committed, in
charge of and responsible to the company for the conduct
of the business of the company. Every person connected
with the company shall not fall within the ambit of the
36
provision. It is only those persons who were in charge of
and responsible for the conduct of business of the
company at the time of commission of an offence, who
will be liable for criminal action. It follows from this that
if a Director of a company who was not in charge of and
was not responsible for the conduct of the business of the
company at the relevant time will not be liable under the
provision." (See para 10)
23.5. "Therefore, in order to bring a case within
Section 141 of the Act, the complaint must disclose the
necessary facts which make a person liable." (See para
12)
24. After setting out the above principles, this Court
in S.M.S. Pharmaceuticals (1) [S.M.S. Pharmaceuticals
Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005 SCC (Cri) 1975 :
(2005) 127 Comp Cas 563] , cited a whole host of judgments of
various High Courts and this Court, including the judgment of
this Court which was then the latest in line, namely, Monaben
Ketanbhai Shah v. State of Gujarat [Monaben Ketanbhai
Shah v. State of Gujarat, (2004) 7 SCC 15: 2004 SCC (Cri)
1857 : (2005) 126 Comp Cas 342] . This Court in S.M.S.
Pharmaceuticals (1) [S.M.S. Pharmaceuticals Ltd. v. Neeta
Bhalla, (2005) 8 SCC 89: 2005 SCC (Cri) 1975: (2005) 127
Comp Cas 563] cited Monaben Ketanbhai Shah [Monaben
Ketanbhai Shah v. State of Gujarat, (2004) 7 SCC 15 : 2004
SCC (Cri) 1857 : (2005) 126 Comp Cas 342] which had held
that it was not necessary to reproduce the language of Section
141 verbatim in the complaint since the complaint was required
to be read as a whole. Monaben Ketanbhai
Shah [MonabenKetanbhai Shah v. State of Gujarat, (2004) 7
SCC 15: 2004 SCC (Cri) 1857: (2005) 126 Comp Cas 342] had
held that if the substance of the allegations made in the
complaint fulfils the requirements of Section 141, the complaint
has to proceed and is required to be tried with. It was further
held in Monaben Ketanbhai Shah [Monaben Ketanbhai
Shah v. State of Gujarat, (2004) 7 SCC 15: 2004 SCC (Cri)
1857: (2005) 126 Comp Cas 342] that in construing a
complaint, a hypertechnical approach should not be adopted and
the laudable object of preventing bouncing of cheques and
sustaining the credibility of commercial transactions had to be
borne in mind.
37
25. After setting out the holding in Monaben Ketanbhai
Shah [Monaben Ketanbhai Shah v. State of Gujarat, (2004) 7
SCC 15 : 2004 SCC (Cri) 1857 : (2005) 126 Comp Cas 342] ,
this Court in S.M.S. Pharmaceuticals (1) [S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005
SCC (Cri) 1975: (2005) 127 Comp Cas 563] in para 18 held as
follows: [S.M.S. Pharmaceuticals (1) [S.M.S. Pharmaceuticals
Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005 SCC (Cri) 1975 :
(2005) 127 Comp Cas 563] , SCC pp. 102-103]
"18. To sum up, there is almost unanimous
judicial opinion that necessary averments ought to
be contained in a complaint before a person can be
subjected to criminal process. A liability under
Section 141 of the Act is sought to be fastened
vicariously on a person connected with a company,
the principal accused being the company itself. It
is a departure from the rule in criminal law against
vicarious liability. A clear case should be spelled
out in the complaint against the person sought to
be made liable. Section 141 of the Act contains the
requirements for making a person liable under the
said provision. That the respondent falls within the
parameters of Section 141 has to be spelled out. A
complaint has to be examined by the Magistrate in
the first instance on the basis of averments
contained therein. If the Magistrate is satisfied
that there are averments which bring the case
within Section 141, he would issue the process.
We have seen that merely being described as a
Director in a company is not sufficient to satisfy
the requirement of Section 141. Even a non-Director
can be liable under Section 141 of the Act. The
averments in the complaint would also serve the
purpose that the person sought to be made liable would
know what is the case which is alleged against him. This
will enable him to meet the case at the trial."
(emphasis supplied)
26. Thereafter, in para 19, the conclusion was
recorded in the following terms: [S.M.S. Pharmaceuticals
(1) case [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla,
38
(2005) 8 SCC 89 : 2005 SCC (Cri) 1975 : (2005) 127
Comp Cas 563] , SCC p. 103]
"19. In view of the above discussion, our
answers to the questions posed in the reference
are as under:
(a) It is necessary to specifically aver
in a complaint under Section 141 that at the
time the offence was committed, the person
accused was in charge of, and responsible for
the conduct of business of the company. This
averment is an essential requirement of
Section 141 and has to be made in a
complaint. Without this averment being made
in a complaint, the requirements of Section
141 cannot be said to be satisfied.
(b) The answer to the question posed
in sub-para (b) has to be in the
negative. Merely being a Director of a
company is not sufficient to make the person
liable under Section 141 of the Act. A Director
in a company cannot be deemed to be in
charge of and responsible to the company for
the conduct of its business. The requirement
of Section 141 is that the person sought to be
made liable should be in charge of and
responsible for the conduct of the business of
the company at the relevant time. This has to
be averred as a fact as there is no deemed
liability of a Director in such cases.
(c) The answer to Question (c) has to
be in the affirmative. The question notes that
the Managing Director or Joint Managing
Director would be admittedly in charge of the
company and responsible to the company for
the conduct of its business. When that is so,
holders of such positions in a company
become liable under Section 141 of the Act.
By virtue of the office they hold as Managing
Director or Joint Managing Director, these
persons are in charge of and responsible for
the conduct of business of the company.
Therefore, they get covered under Section
141. So far as the signatory of a cheque which is
dishonoured is concerned, he is clearly responsible
for the incriminating act and will be covered under
sub-section (2) of Section 141."
39
(emphasis supplied)
27. Hence, it is very clear that the conclusion in para
19(a) in S.M.S. Pharmaceuticals (1) [S.M.S. Pharmaceuticals
Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005 SCC (Cri) 1975 :
(2005) 127 Comp Cas 563] has to be read with the other
holdings in judgment especially the ratio extracted hereinabove
culminating in para 18. Merely reading para 19(a) to contend
that what is required is parroting of the words of the section for
a complaint to be sustained is completely unjustified. Para 19(a)
does not mention that the words of Section 141 have to be
mechanically parroted. In fact, the cases that we discuss
hereinbelow have expressly rejected the said contention.
28. After the reference in S.M.S. Pharmaceuticals
(1) [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC
89 : 2005 SCC (Cri) 1975 : (2005) 127 Comp Cas 563] was
answered by the three-Judge Bench and before the case of the
said parties could be taken up for disposal by the two-Judge
Bench, came the judgment in Sabitha Ramamurthy v. R.B.S.
Channabasavaradhya [Sabitha Ramamurthy v. R.B.S.
Channabasavaradhya, (2006) 10 SCC 581 : (2007) 1 SCC (Cri)
621 : (2006) 133 Comp Cas 680] . This Court, after
noticing S.M.S. Pharmaceuticals (1) [S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 :
2005 SCC (Cri) 1975 : (2005) 127 Comp Cas 563] , held
that it was not necessary for the complainant to
specifically reproduce the wordings of the section but
what was required was a clear statement of fact so as to
enable the Court to arrive at a prima facie opinion that
the accused are vicariously liable. Such vicarious liability
can be inferred only if the requisite statements, which are
required to be averred in the complaint petition are made
so as to make the accused therein vicariously liable for
the offence committed by the company. It was also held
that before a person can be made vicariously liable, strict
compliance with the statutory requirements should be
insisted. On facts, the Court found that the averments did not
meet the requirements in the said case.
29. Thereafter, came the judgment in S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla [S.M.S. Pharmaceuticals
Ltd. v. Neeta Bhalla, (2007) 4 SCC 70 : (2007) 2 SCC (Cri) 192
40
: (2007) 136 Comp Cas 268] [hereinafter referred to as "S.M.S.
Pharmaceuticals (2)"]. Referring to paras 18 and 19 of the order
in the three-Judge Bench reference in S.M.S.Pharmaceuticals
(1) [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC
89 : 2005 SCC (Cri) 1975 : (2005) 127 Comp Cas 563] and
following the judgment in Sabitha Ramamurthy [Sabitha
Ramamurthy v. R.B.S. Channabasavaradhya, (2006) 10 SCC
581 : (2007) 1 SCC (Cri) 621 : (2006) 133 Comp Cas 680] , the
averments in the complaint were tested and it was found that
the complaint petition when read in its entirety, the averments
therein fell short of the requirements to implicate the
respondent-accused in that case.
30. To the same effect is the judgment of this Court
in A.K. Singhania v. Gujarat State Fertilizer Co. Ltd. [A.K.
Singhania v. Gujarat State Fertilizer Co. Ltd., (2013) 16 SCC
630 : (2014) 5 SCC (Civ) 578 : (2014) 6 SCC (Cri) 356 : (2014)
182 Comp Cas 572] , wherein this Court categorically ruled as
under: (SCC p. 638, para 14)
"14. From a plain reading of the aforesaid
provision it is evident that every person who at the time
the offence was committed was in charge of and
responsible to the company shall be deemed to be guilty
of the offence under Section 138 of the Act. In the face
of it, will it be necessary to specifically state in the
complaint that the person accused was in charge of and
responsible for the conduct of the business of the
company? In our opinion, in the case of offence by
the company, to bring its Directors within the
mischief of Section 138 of the Act, it shall be
necessary to allege that they were in charge of and
responsible to the conduct of the business of the
company. It is a necessary ingredient which would
be sufficient to proceed against such Directors.
However, we may add that as no particular form is
prescribed, it may not be necessary to reproduce
the words of the section. If reading of the
complaint shows and the substance of accusation
discloses necessary averments, that would be
sufficient to proceed against such of the Directors
and no particular form is necessary. However, it may
not be necessary to allege and prove that, in fact, such
41
of the Directors have any specific role in respect of the
transaction leading to issuance of cheque. Section 141 of
the Act makes the Directors in charge of and responsible
to the company "for the conduct of the business of the
company" within the mischief of Section 138 of the Act
and not particular business for which the cheque was
issued. We cannot read more than what has been
mandated in Section 141 of the Act."
(emphasis supplied)
31. In Ashok Shewakramani v. State of A.P. [Ashok
Shewakramani v. State of A.P., (2023) 8 SCC 473 : (2023) 4
SCC (Civ) 116 : (2023) 3 SCC (Cri) 568 : (2024) 243 Comp Cas
310], a judgment relied upon by Respondent 2, the averments
did not satisfy the ingredients of Section 141 and this Court
observed that all that was averred in that case (the first set of
appeal therein) was that the accused were liable for the
transactions of the company and they were fully aware of the
issuance of the cheque and dishonour of the cheque. This Court
held that even taking a broad and liberal view of the pleadings
in the complaint, there was no compliance with the
requirements of Section 141(1). In the second set of appeals
therein the accused Directors were not even described as
Directors of the first accused company therein. On that simple
ground, proceedings were quashed. In the third set of appeals
therein, insofar as the Directors were concerned, who were
Accused 4 to 7, an omnibus averment was made in the following
terms: (SCC p. 478, para 17)
"17. ... '(1) It is submitted that the complainant is
the proprietor of Sri Chakra Cotton Traders, doing
business in cotton, resident of bearing Door No. 3/917-
1, Sri Chackra Nilayam, YMR Colony, Proddatur Town-
516 360, Kadapa District, A.P.
Accused 1 is the private limited company
concerned and registered under the Companies Act.
Accused 2 is Chairman of Accused 1. Accused 3 is the
Managing Director of Accused 2 and Accused 4 to 7 are
the Directors of Accused 1 Company and Accused 2 to 7
are managing the Company and busy with day-to-day
affairs of the Company and all are managing the
Company and also in charge of the Company and all are
42
jointly and severally liable for the acts of Accused 1
Company.' "
Considering these averments, the Court while quashing the
proceedings held that merely because somebody is managing
the affairs of company, per se they do not become in charge of
the conduct of the business of the company or the person
responsible for the company for the conduct of the business of
the company.
32. It was further held in Ashok Shewakramani
case [Ashok Shewakramani v. State of A.P., (2023) 8 SCC
473 : (2023) 4 SCC (Civ) 116 : (2023) 3 SCC (Cri) 568 :
(2024) 243 Comp Cas 310] that the averment that the
accused were busy with the day-to-day affairs was also
insufficient to attract the ingredients of Section 141(1).
Proceeding further, the Court held that merely averring
that the accused were in charge of the company was
neither here nor there as such averment was insufficient
to conclude that the accused were responsible to the
company for the conduct of the business. This is vastly
different from the averments in the present case wherein
it is clearly averred that Respondent 2 was responsible
for the day-to-day affairs, management and working of
Accused 1 Company.
33. Ashok Shewakramani [Ashok
Shewakramani v. State of A.P., (2023) 8 SCC 473 : (2023)
4 SCC (Civ) 116 : (2023) 3 SCC (Cri) 568 : (2024) 243
Comp Cas 310] turned on the special facts of that case.
This is more so since the averments in the complaint
therein extracted hereinabove lumping the role of the
Directors with others and making omnibus averments,
was found to be insufficient to attract the vicarious
liability under Section 141(1) of the NI Act.
34. In Ashutosh Ashok Parasrampuriya v. Gharrkul
Industries (P) Ltd. [Ashutosh Ashok
Parasrampuriya v. Gharrkul Industries (P) Ltd., (2023)
14 SCC 770 : (2025) 1 SCC (Civ) 255 : (2021) 229 Comp
Cas 1] , after noticing that the averments in the
complaint were to the effect that the Directors of the
accused company were responsible for its business and
43
all the appellant-accused therein were involved in the
business of the company and are responsible for all the
affairs of the company, this Court held that reading the
complaint as a whole, the ingredients of Section 141 were
satisfied.
35. What is important to note is that the repetition
of the exact words of the section in the same order, like a
mantra or a magic incantation is not the mandate of the
law. What is mandated is that the complaint should spell
out that the accused sought to be arrayed falls within the
parameters of Section 141(1) of the NI Act. Only then
could vicarious liability be inferred against the said
accused, so as to proceed to trial. Substance will prevail
over form.
36. Strong reliance is placed on Siby Thomas [Siby
Thomas v. Somany Ceramics Ltd., (2024) 1 SCC 348 : (2024) 1
SCC (Civ) 243 : (2024) 1 SCC (Cri) 268] by the learned counsel
for Respondent 2 to contend that in the absence of the words
"was in charge of", the present case against Respondent 2
cannot be proceeded. We are unable to countenance the said
submission. This Court, in Siby Thomas [Siby
Thomas v. Somany Ceramics Ltd., (2024) 1 SCC 348 : (2024) 1
SCC (Civ) 243 : (2024) 1 SCC (Cri) 268] , on facts, found that
on an overall reading of the complaint it did not disclose any
clear and specific role to the appellant-accused therein. It was
further held that what was averred was only that the accused
being partners are responsible for the day-to-day conduct of
business of the company. This is vastly different from the
averments in the present case as discussed hereinabove. In this
case, it is clearly averred that Respondent 2 along with Accused
3 and 4 being Directors were responsible for its day-to-day
affairs, management and working of Accused 1 Company.
Hence, the judgment in Siby Thomas [Siby Thomas v. Somany
Ceramics Ltd., (2024) 1 SCC 348 : (2024) 1 SCC (Civ) 243 :
(2024) 1 SCC (Cri) 268] can be of no help to Respondent 2 as
the case turned on its own facts.
37. The other aspect of the matter canvassed by the
learned counsel for Respondent 2 is that not only are the basic
averments as enshrined in Section 141 to be mandatorily
incorporated but also the specific role be attributed to the
44
persons who are mere Directors or employees of the company.
We are unable to agree with the submission of the learned
counsel.
38. Recently, this Court in S.P. Mani & Mohan
Dairy v. Snehalatha Elangovan [S.P. Mani & Mohan
Dairy v. Snehalatha Elangovan, (2023) 10 SCC 685 : (2024) 1
SCC (Civ) 569 : (2024) 1 SCC (Cri) 203 : (2022) 235 Comp Cas
212] , after reiterating the principle that it was not necessary to
reproduce the language of Section 141 verbatim in the
complaint further reiterated the holding in K.K. Ahuja v. V.K.
Vora [K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48 : (2009) 4
SCC (Civ) 1 : (2010) 2 SCC (Cri) 1181 : (2009) 152 Comp Cas
520] . In K.K. Ahuja [K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48
: (2009) 4 SCC (Civ) 1 : (2010) 2 SCC (Cri) 1181 : (2009) 152
Comp Cas 520] , it was held that insofar as the Director was
concerned, an averment in the complaint that he was in
charge of, and was responsible to the company, for the
conduct of the business of the company was enough and
no further averment was necessary though some
particulars will be desirable.
39. Thereafter, this Court in S.P. Mani [S.P. Mani &
Mohan Dairy v. SnehalathaElangovan, (2023) 10 SCC 685 :
(2024) 1 SCC (Civ) 569 : (2024) 1 SCC (Cri) 203 : (2022) 235
Comp Cas 212] , in para 58.2 of the judgment concluded as
under: (SCC pp. 716-17)
"58.2. The complainant is supposed to know
only generally as to who were in charge of the
affairs of the company or firm, as the case may be.
The other administrative matters would be within
the special knowledge of the company or the firm
and those who are in charge of it. In such
circumstances, the complainant is expected to
allege that the persons named in the complaint are
in charge of the affairs of the company/firm. It is
only the Directors of the company or the partners
of the firm, as the case may be, who have the
special knowledge about the role they had played
in the company or the partners in a firm to show
before the Court that at the relevant point of time
they were not in charge of the affairs of the
company. Advertence to Sections 138 and Section
45
141, respectively, of the NI Act shows that on the
other elements of an offence under Section 138
being satisfied, the burden is on the Board of
Directors or the officers in charge of the affairs of
the company/partners of a firm to show that they
were not liable to be convicted. The existence of any
special circumstance that makes them not liable is
something that is peculiarly within their knowledge and
it is for them to establish at the trial to show that at the
relevant time they were not in charge of the affairs of
the company or the firm."
40. As was rightly held therein, the administrative role
of each Director would be within the special knowledge of
the company or the Director of the firm and it is for them
to establish that they were not in charge of the affairs of
the company. In view of this, the contention of the
learned counsel for Respondent 2 that the specific role
attributed to the Directors should be set out in the
complaint does not merit acceptance. Reliance has been
placed on National Small Industries Corpn.
Ltd. v. Harmeet Singh Paintal [National Small Industries
Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 :
(2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113 :
(2010) 154 Comp Cas 313] by the learned counsel for
Respondent 2 in support of the proposition canvassed.
We are unable to countenance the said submission. If the
learned counsel by the said submission seeks to contend
that the complainant in a Section 138 complaint is
obliged to plead administrative matters which are
especially within the knowledge of the company and the
Directors, then he is completely wrong in the
understanding of the ingredients of Section 141. As held
in K.K. Ahuja [K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48 :
(2009) 4 SCC (Civ) 1 : (2010) 2 SCC (Cri) 1181 : (2009)
152 Comp Cas 520] and reiterated in S.P. Mani [S.P. Mani
& Mohan Dairy v. SnehalathaElangovan, (2023) 10 SCC
685 : (2024) 1 SCC (Civ) 569 : (2024) 1 SCC (Cri) 203 :
(2022) 235 Comp Cas 212] , the complainant is supposed
to know only generally as to who are in charge of the
affairs of the company.
41. Harmeet Singh Paintal [National Small
Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3
46
SCC 330 : (2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri)
1113 : (2010) 154 Comp Cas 313] when it holds in para
22 that: (SCC p. 339)
22. ... "further, in order to fasten the
vicarious liability in accordance with Section 141,
the averment as to the role of the Directors
concerned should be specific. The description
should be clear and there should be some
unambiguous allegations as to how the Directors
concerned were alleged to be in charge of and
were responsible for the conduct of the affairs of
the company."
should be understood to only mean vis-à-vis the
transaction concerning the issue of the cheque, in
question, which are within the knowledge of the
complainant.
42.K.K. Ahuja [K.K. Ahuja v. V.K. Vora, (2009) 10
SCC 48 : (2009) 4 SCC (Civ) 1 : (2010) 2 SCC (Cri) 1181 :
(2009) 152 Comp Cas 520] where it holds that: (SCC pp.
61-62, para 27)
"27. ... (iii) In the case of a Director,
secretary or manager [as defined in Section 2(24)
of the Companies Act] or a person referred to in
clauses (e) and (f) of Section 5 of the Companies
Act, an averment in the complaint that he was in
charge of, and was responsible to the company,
for the conduct of the business of the company is
necessary to bring the case under Section 141(1)
of the Act. No further averment would be
necessary in the complaint, though some
particulars will be desirable. They can also be
made liable under Section 141(2) by making
necessary averments relating to consent and
connivance or negligence, in the complaint, to
bring the matter under that sub-section."
sets out the correct legal position.
43. A harmonious reading of the judgments in K.K.
Ahuja [K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48 : (2009) 4
SCC (Civ) 1 : (2010) 2 SCC (Cri) 1181 : (2009) 152 Comp Cas
47
520] , Harmeet Singh Paintal [National Small Industries Corpn.
Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1 SCC
(Civ) 677 : (2010) 2 SCC (Cri) 1113 : (2010) 154 Comp Cas
313] and S.P. Mani [S.P. Mani & Mohan Dairy v. Snehalatha
Elangovan, (2023) 10 SCC 685 : (2024) 1 SCC (Civ) 569 :
(2024) 1 SCC (Cri) 203 : (2022) 235 Comp Cas 212] brings out
the position that there is no obligation on the complainant
to plead in the complaint as to matters within the special
knowledge of the company or the Directors or firm about
the specific role attributed to them in the company."
The Apex Court considers the entire spectrum of law and holds that
repetition of words in Section 141 of the Act in the same order is
not the mandate of law; what the law mandates is that the
complaint should spell out that the accused sought to be arrayed
falls within the parameters of sub-section (1) of Section 141 of the
Act. Only then vicarious liability can be inferred against the accused
so as to proceed to trial. Substance prevails over form. The
administrative role of each of the Directors should be within the
special knowledge of the Company or the Director of the firm. It is
for them - accused to establish that they were not in-charge of the
affairs of the Company.
48
9.4. Later, the Apex Court in the case of BHARAT MITTAL v.
STATE OF RAJASTHAN4, holds as follows:
".... .... ....
I. THE PRINCIPLES OF VICARIOUS LIABILITY -
WHO CAN BE MADE RESPONSIBLE FOR THE OFFENCE OF
SECTION 138 COMMITTED BY A COMPANY.
11. Section 141 of the NI Act fastens vicarious
liability under Section 138 read with Section 141 upon
'every person who, at the time the offence was
committed, was in charge of and responsible to the
company for the conduct of its business', as well as upon
the company itself. A plain reading of Section 141
indicates that liability may be attributed to three distinct
categories of persons:
i. the Company
ii. every person who, at the time of commission of
the offence, was in charge of and responsible to
the company for the conduct of its business
iii. any director, manager, secretary, or officer of
the company with whose consent, connivance,
or due neglect the company committed the
offence.13
12. In K.K. Ahuja v. V.K. Vora14., the issue that arose for
consideration was whether a director or officer could be held
vicariously liable under Section 141 merely on account of his
designation. This Court answered the question in the
negative, holding that vicarious liability under Section
141 attaches only to those persons who, at the time of
commission of the offence, were in charge of and
responsible for the conduct of the business of the
company. The Court further held that while a Managing
Director or Joint Managing Director may, by virtue of
4
2025 SCC OnLine SC 2856
49
their position, be presumed to be in charge of the
business, any other director or officer would require
specific and necessary averments demonstrating their
role, responsibilities, and involvement in the conduct of
the company's affairs.Mere designation as a director or
officer is not sufficient. In Central Bureau of
Investigation v. Asian Global Ltd.15, this Court reiterated that
criminal liability cannot be imposed mechanically or on the basis
of assumptions. There must be material to indicate
participation of the accused in the day-to-day
management or decision-making of the company.
Vicarious liability in criminal jurisprudence arises only
where the statute expressly provides for such liability
and where the statutory conditions are duly fulfilled.
Similarly, in National Small Industries Corporation
Ltd. v. Harmeet Singh Paintal16, this Court held that, for
fastening liability under Section 141, the complaint must
contain clear and specific averments to the effect that the
accused was in charge of and responsible for the conduct
of the business of the company at the relevant time. A
mere reproduction of the statutory language or bald
assertions without particulars would not suffice.
13. In the judgment relating to vicarious liability in SMS
Pharmaceuticals Ltd. v. Neeta Bhalla17, this Court while
answering a reference relating to vicarious liability of directors
held as follows:
1. This matter arises from a reference made by a
two Judge Bench of this Court for determination of the
following questions by a larger Bench:
"(a) whether for purposes of Section 141 of
the Negotiable Instruments Act, 1881, it is sufficient if
the substance of the allegation read as a whole fulfill the
requirements of the said section and it is not necessary
to specifically state in the complaint that the persons
accused was in charge of, or responsible for, the conduct
of the business of the company.
(b) whether a director of a company would be
deemed to be in charge of, and responsible to, the
company for conduct of the business of the company
50
and, therefore, deemed to be guilty of the offence
unless he proves to the contrary.
(c) even if it is held that specific averments are
necessary, whether in the absence of such averments
the signatory of the cheque and or the Managing
Directors of Joint Managing Director who admittedly
would be in charge of the company and responsible to
the company for conduct of its business could be
proceeded against."
......
19. In view of the above discussion, our answers
to the questions posed in the Reference are as under:
(a) It is necessary to specifically aver in a
complaint under Section 141 that at the time the
offence was committed, the person accused was in
charge of, and responsible for the conduct of
business of the company. This averment is an
essential requirement of Section 141 and has to be
made in a complaint. Without this averment being
made in a complaint, the requirements of Section
141 cannot be said to be satisfied.
(b) The answer to question posed in sub-para (b)
has to be in negative. Merely being a director of a
company is not sufficient to make the person liable
under Section 141 of the Act. A director in a
company cannot be deemed to be in charge of and
responsible to the company for conduct of its
business. The requirement of Section 141 is that
the person sought to be made liable should be in
charge of and responsible for the conduct of the
business of the company at the relevant time. This
has to be averred as a fact as there is no deemed
liability of a director in such cases.
(c) The answer to question (c) has to be in
affirmative. The question notes that the Managing
Director or Joint Managing Director would be
admittedly in charge of the company and
responsible to the company for conduct of its
business. When that is so, holders of such
positions in a company become liable under
Section 141 of the Act. By virtue of the office they
51
hold as Managing Director or Joint Managing
Director, these persons are in charge of and
responsible for the conduct of business of the
company. Therefore, they get covered under
Section 141. So far as signatory of a cheque which
is dishonoured is concerned, he is clearly
responsible for the incriminating act and will be
covered under Subsection (2) of Section 141.
14. It is necessary to reiterate this position of law for the
reason that where a company commits an offence under
Section 138 read with Section 141 of the Negotiable
Instruments Act, the persons who were in charge of and
responsible for the conduct of its affairs at the relevant
time may also be held vicariously liable along with the
company."
The said judgment follows the judgment in SMS
PHARMACEUTICALS LIMITED v. NEETA BHALLA reported in
(2005) 8 SCC 89, which had clearly held that it is necessary to
specifically aver in the complaint with regard to the role to play in
the transaction.
9.5. In the light of the afore-quoted judgments of the Apex
Court, what becomes imperative is the averment in the complaint.
The averment in the complaint and the sworn statement is blurring
insofar as the wife Smt. Kavitha Chopra is concerned. The husband
- Dhirendra Chopra is shown as the Managing Director of accused
No.1/Company as per the company information obtained from the
52
website of the Ministry of Corporate Affairs appended to the
petition. It is the Managing Director who would obviously be the
person in-charge of the affairs of the Company. Therefore, in the
absence of specific averment against the wife Smt. Kavitha Chopra,
permitting further proceedings to continue against her would
become an abuse of the process of law.
10. In Criminal Petition No.2797 of 2026, the cheque is issued
from the joint account belonging to both the petitioners. It becomes
apposite to refer to the judgment of the Apex Court in the case of
APARNA A. SHAH v. SHETH DEVELOPERS (PRIVATE)
LIMITED5, wherein it is held as follows:
".... .... ....
28. We also hold that under Section 138 of the NI Act,
in case of issuance of cheque from joint accounts, a joint
account-holder cannot be prosecuted unless the cheque
has been signed by each and every person who is a joint
account-holder. The said principle is an exception to Section
141 of the NI Act which would have no application in the case
on hand. The proceedings filed under Section 138 cannot be
used as arm-twisting tactics to recover the amount allegedly
due from the appellant. It cannot be said that the complainant
has no remedy against the appellant but certainly not under
Section 138. The culpability attached to the dishonour of a
cheque can, in no case "except in case of Section 141 of the NI
Act" be extended to those on whose behalf the cheque is issued.
5
(2013) 8 SCC 71
53
This Court reiterates that it is only the drawer of the cheque
who can be made an accused in any proceeding under Section
138 of the Act. Even the High Court has specifically recorded the
stand of the appellant that she was not the signatory of the
cheque but rejected the contention that the amount was not due
and payable by her solely on the ground that the trial is in
progress. It is to be noted that only after issuance of process, a
person can approach the High Court seeking quashing of the
same on various grounds available to him. Accordingly, the High
Court was clearly wrong in holding that the prayer of the
appellant cannot even be considered. Further, the High Court
itself has directed the Magistrate to carry out the process of
admission/denial of documents. In such circumstances, it cannot
be concluded that the trial is in advanced stage."
(Emphasis supplied at each instance)
The Apex Court holds that a joint account holder can be prosecuted
when he is a signatory to the cheque. Therefore, it is for the
husband/Dhirendra Chopra who is shown to be the Managing
Director of the Company to answer the allegations that is brought
before the Court. In the considered view of the Court, the wife/
Smt. Kavitha Chopra cannot be permitted to be prosecuted.
11. For the aforesaid reasons, the following:
ORDER
(i) Criminal Petitions Nos. 1978, 2041 and 2091 of 2026
filed by the wife/Smt. Kavitha Chopra challenging her
54
SPONSORED
prosecution stand allowed. Proceedings in
C.C.Nos.13525 of 2025, 13260 of 2025 and 13527 of
2025 pending on the file of XXV Additional Chief Judicial
Magistrate, Bengaluru against the wife, in all these
cases, stand quashed.
(ii) Criminal Petition Nos. 2797 and 2854 of 2026 filed by
the husband/Sri. Dhirendra Chopra, an accused in these
cases, stand dismissed.
Pending applications if any also stand disposed, as a
consequence.
Sd/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ
