SABITHA RAMAMURTHY AND ANR. versus R.B.S. CHANNABASAVARADHA

SABITHA RAMAMURTHY AND ANR. versus R.B.S. CHANNABASAVARADHA

To fasten liability under Section 141, a clear averment is required in the complaint that the accused was in charge of and responsible for the conduct of the company's business at the relevant time; mere designation as director does not suffice.

Parties
Appellant: Sabitha Ramamurthy and Anr.; Respondent: R.B.S. Channabasavaradhya
Jurisdiction
India
Judgment Date
13 September 2006
Procedural Posture
Civil Appeal / Appeal From Karnataka High Court Judgment in C.r.l.p. Nos. 3432 3433/2004
Outcome
Appeal allowed
Legal Topics
Negotiable Instruments, Vicarious Liability, Director Liability Under Companies Act
Criminal Law Corporate Law Negotiable Instruments Vicarious Liability Director Liability Under Companies Act

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Parties

Sabitha Ramamurthy and Anr.

Appellant

R.B.S. Channabasavaradhya

Respondent

Procedural Posture

Civil Appeal / Appeal From Karnataka High Court Judgment in C.r.l.p. Nos. 3432 3433/2004

Legal Issues

  1. 1 Whether the complaint under Section 138 of the Negotiable Instruments Act properly averred the accused-directors were in charge of and responsible for the company at the time of commission of the offence
  2. 2 Whether merely being a director is sufficient to impose liability under Section 141 of the Negotiable Instruments Act

Ratio Decidendi

To fasten liability under Section 141, a clear averment is required in the complaint that the accused was in charge of and responsible for the conduct of the company's business at the relevant time; mere designation as director does not suffice.

Court Disposition

Appeal allowed

Orders

  • Impugned judgments of Karnataka High Court set aside
  • Processes issued by Addl. Chief Metropolitan Magistrate, Bangalore against appellants quashed