CRM-M-54980-2018 1 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH 152-A CRM-M-54980-2018 Date of Decision:-21.07.2026 BHARAT BHUSHAN JAIN ......PETITIONER VS. IDBI BANK LTD. .....RESPONDENT CORAM:-HON'BLE MR. JUSTICE JASJIT SINGH BEDI Present: Mr. Vaibhav Narang, Advocate and Mr. Subhash Chand, Advocate for the petitioner. Mr. Deepender Singh, Sr. Advocate with Mr. Nipun Gupta, Advocate for the respondent-Bank. **** JASJIT SINGH BEDI , J.(ORAL ) 1. The prayer in the present petition under Section 482 of the Code of Criminal Procedure is for quashing of criminal complaint No. 17486/2012 dated 22.10.2012 (Annexure P/3), the summoning order dated 23.10.2012 (Annexure P/4), passed by Ld. JMIC, Chandigarh, in a complaint filed under section 138 read with Section 141 of Negotiable Instruments Act, 1881 titled as IDBI Bank Limited versus Surya Pharmaceuticals Ltd. and others and all consequential proceedings arising therefrom. 2. The brief allegations levelled in the complaint are that in discharge of its legal liability, 09 cheques were issued by the accused- Company, all of which were dishonoured, leading to the filing of the complaint under Section 138 read with Section 141 of Negotiable Instruments Act, 1881 (Annexure P-3) and the consequential summoning order under Section 138 of Negotiable Instruments Act, 1881 (Annexure P-4), which are challenged in the present petition. KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 2 3. The learned counsel for the petitioner contends that the petitioner was not a Director of the company, as is averred in the complaint. In fact, he was a General Manager - Finance & Accounts. He was a paid employee of the company, and therefore, cannot be held liable under Section 141 of Negotiable Instruments Act, 1881. He contends that there is a Board Resolution dated 01.10.2011, as per which, only Shri Rajiv Goyal, Managing Director of the company, was authorized to sign cheques and negotiate with the Bank. The petitioner is not a signatory to any of the cheques. Therefore, he prays that the complaint dated 22.10.2012 and summoning order dated 23.10.2012 be quashed qua him. 4. The learned Senior counsel for the respondent/Bank, on the other hand, contends that there may be a factual mistake in the averment qua the designation of the petitioner, inasmuch as he is stated to be a Director, though he is a General Manager - Finance & Accounts. However, the complaint categorically discloses the role of all the accused, including the petitioner. There is nothing in Section 141 of Negotiable Instruments Act, 1881, that protects a paid employee or a Manager or provides that only a Director/Managing Director can be held responsible/liable. As regards the Board Resolution dated 01.10.2011, he contends that the same has little relevance in the present case because it is no one’s case that the petitioner is a signatory to the cheques. There is a categoric averment in the complaint that accused Nos. 2 to 6, including the petitioner, came to negotiate with the Bank for the purpose of availing a loan, and merely because another officer was responsible would be of little relevance in view of the specific averments made in the complaint. Whether the petitioner was in charge of and responsible for the affairs of KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 3 the company, and the defence of the petitioner that he was not, shall be a matter of adjudication during the course of the Trial. He therefore, prays that the present petition is liable to be dismissed. 5. I have heard learned counsels for the parties. 6. Section 141 of Negotiable Instruments Act, 1881 reads as under:- 141. Offences by companies.— (1) If the person committing an offence under section 138 is 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 person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.” 7. In the judgment of the Hon’ble Supreme Court in the case of ‘S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla and anr’ 2005(4) RCR KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 4 (Criminal) 141, bearing Criminal Appeal No.664 of 2002 decided on 20.09.2005, it has been categorically held that the designation of a person of a company is not relevant, but the nature of the job that he performs in the company is. Every Director/officer of the company is not liable if he is not stated to be in charge of and responsible for running the business of the company. Conversely, if a person is stated to be in charge of and responsible for running the business of the company but does not hold any post, he can still be liable. The relevant extract of the judgment in S.M.S. Pharmaceuticals Ltd. (supra) is as under:- “13. While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. The key words which occur in the Section are "every person". These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words "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 etc." 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 provision. It is only those persons who were in charge of and responsible for 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 KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 5 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. The liability arises from being in charge of and responsible for conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a Company may be liable if he satisfies the main requirement of being in charge of and responsible for conduct of business of a Company at the relevant time. Liability depends on the role one plays in the affairs of a Company and not on designation or status. If being a Director or Manager or Secretary was enough to cast criminal liability, the Section would have said so. Instead of "every person" the section would have said "every Director, Manager or Secretary in a Company is liable"....etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action. 14. A reference to sub-section (2) of Section 141 fortifies the above reasoning because sub- section (2) envisages direct involvement of any Director, Manager, Secretary or other officer of a company in commission of an offence. This section operates when in a trial it is proved that the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of these offices in a company. In such a case, such persons are to be held liable. Provision has been made for Directors, Managers, Secretaries and other officers of a company to cover them in cases of their proved involvement. KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 6 15. The conclusion is inevitable that the liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. 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. 20. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a persons 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 respondent falls within 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. 21. 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 KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 7 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 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 sub-section (2) of Section 141.” KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 8 8. The relevant extract of the impugned complaint enumerating the role of all the accused including the petitioner is as under :- “4. The accused No.2 is the Managing Director and accused No.3 to 6 are the active Directors of the accused Company and they are fully responsible for conduct of the business of the accused Company. The day to day affairs of accused No.1 Company are managed by accused No.2 to 6 and as such they are in control of the affairs of the accused No.1 Company and liable for all the Acts and deeds committed on behalf of accused No.1 Company. The accused NO.2 to 6 are holding very important positions in the management of accused No.1 Company as indicated above and are incharge of and responsible to the Company for conduct of the business of the company. The accused No.2 to 6 have been regularly approaching the complainant for negotiation regarding the financial assistance granted to the complainant Company and it was, inter alia, on their assurances that the financial assistance was granted to the accused No.1 Company by the complainant. 5. That the accused No.1 Company through accused No.2 to 6 approached the complainant for financial assistants by way of working capital facility and the complainant sanctioned/enhanced a limit of Rs.40 Crores vide its Letter of Intent dated Febraury 11, 2012.” 9. A perusal of the averments above clearly establishes that the accused Nos.2 to 6, including the petitioner, who is accused No.5 were stated to be in charge of and responsible for the conduct of the business of the company. It has also been categorically mentioned that it was KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh CRM-M-54980-2018 9 accused Nos.2 to 6 who approached the complainant for financial assistance on behalf of the accused No.1-Company. Merely because the petitioner’s designation has been described as a Director, though he was a General Manager – Finance & Accounts, would have little relevance, as the respondent/Bank is not supposed to know the exact designation of an officer of the company. In view of the judgment in S.M.S. Pharmaceuticals Ltd. (supra), even if the petitioner has not holding any office, he would still be prima facie liable under Section 141 of Negotiable Instruments Act, 1881. Therefore, merely because he was described as a Director though he was a General Manager – Finance & Accounts does not entail quashing of the FIR, in view of the specific allegations levelled against him in the complaint. 10. The defence of the petitioner that he was a paid employee, and could not be in charge of and responsible for the conduct of the business of the company and hence could not held to be liable under Section 141 of the Negotiable Instruments Act, 1881, is a matter of adjudication during the course of the Trial and cannot be considered in summary proceedings under Section 482 Cr.P.C. 11. In view of the above, I find no merit in the present petition and the same stands dismissed. 12. All the miscellaneous applications, if any, stand disposed of. (JASJIT SINGH BEDI) 21.07.2026 JUDGE Kusum Whether speaking/reasoned Yes/No Whether reportable Yes/No KUSUM 2026.07.23 10:55 I attest to the accuracy and integrity of this document PHHC Chandigarh