Only by saying that a person was in charge of the company at the time when the offence was committed is not sufficient to attract Section 141(1) of Negotiable Instruments (NI) Act, 1881 – Ashok Shewakramani & Ors. Vs. State of Andhra Pradesh & Anr. – Supreme Court

Hon’ble Supreme Court held that:
(i) Section 141 is an exception to the normal rule that there cannot be any vicarious liability when it comes to a penal provision.
(ii) Every person who is sought to be roped in by virtue of sub-section 1 of Section 141 NI Act must be a 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. Merely because somebody is managing the affairs of the company, per se, he does 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.
(iii) Only by saying that a person was in charge of the company at the time when the offence was committed is not sufficient to attract sub-section 1 of Section 141 of the NI Act.
(iv) On a plain reading of Section 141, it is apparent that the words “was in charge of” and “was responsible to the company for the conduct of the business of the company” cannot be read disjunctively and the same ought be read conjunctively in view of use of the word “and” in between.

Only by saying that a person was in charge of the company at the time when the offence was committed is not sufficient to attract Section 141(1) of Negotiable Instruments (NI) Act, 1881 – Ashok Shewakramani & Ors. Vs. State of Andhra Pradesh & Anr. – Supreme Court Read Post »