Jojy George Koduvath

From Sec. 141 of the NI Act, it comes out –

• Company, Firm and Society are treated alike for the purpose of cheque-bounce-cases.
• A partner in a firm or Governing Body member in a Society is treated like a director in a Company.
• Every person (director, partner or Governing Body member) who, at the time the offence was committed, was in charge of, and was responsible (to the company, firm or society for the conduct of its business), shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
• Apart from the director, partner or Governing Body member, the company, firm or society shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
• The company, firm or society shall be a necessary party.
• If the director, partner or Governing Body member proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence, such person will not be liable to punishment.
• The nominated Director of a Government  company or a financial corporation shall not be liable for prosecution.
• If the offence has been committed by a company, firm or society and it is proved that the offence has been committed with the consent or connivance of any any director, manager, secretary or other officer, 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.

Sec. 141 of the NI Act 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:
• Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
• (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.
• Explanation.— For the purposes of this section,—
• (a) “company” means any body corporate and includes a firm or other association of individuals; and
• (b) “director”, in relation to a firm, means a partner in the firm.

Relevant Decisions in these matters

• Pawan Kumar Goel v. State of U.P., (2022) SCC OnLine SC 1598,
• Sunita Palita v. Panchami Stone Quarry, 2022 SC OnLine SCC 945,
• Secretary to Govt of Kerala v. james Varghese, (2022) 9 SCC 593,
• S.P. Mani v. Dr. Snehalatha Elangovan, (2022) SCC Online SC 1238,
• Sunita Palita v. Panchami Stone Quarry, (2022) 10 SCC 152
• P. Saravana Kumar v. S.P. Vijaya Kumar, (2022) SCC Online Mad 1387,
• P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258,
• Dr. Shah Faesal v. Union of India, (2020) 4 SCC 1,
• Peerless General Finance v. Commissioner of IT, (2020) 18 SCC 625,
• Surinder Singh Deswal v. Virender Gandhi (2020) 2 SCC 514,
• G.J. Raja v. Tejraj Surana (2019) 19 SCC 469,
• Surinder Singh Deswal v. Virender Gandhi (2019) 11 SCC 341,
• Nandkishor Prallhad Vyvhare v. Mangala, (2018) 3 MhLJ 913,
• Rodger Shashoua v. Mukesh Sharma, (2017) 14 SCC 1,
• Eerra Through Dr. Manjula v. State (NCT of Delhi), (2017) 15 SCC 133,
• South Central Railway Employees Coop. Credit Society v. B. Yashodabai (2015) 2 SCC 727,
• Rathod v. State of Maharashtra, (2014) 9 SCC 129,
• Pooja Ravinder Devidsani v. State of Maharashtra, (2014) 16 SCC 1,
• Sundeep Kumar Bafna v. State of Maharashtra, (2014) 16 SCC 623,
• Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd., (2012) 5 SCC 661,
• Hada v. Godfather Travels & Tours, 2012-5 SCC 661,
• National Small-Scale Industries v. Harmeet Singh, (2010) 3 SCC 330,
• K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48,
• N. Harihara v. J Thomas, (2008) 13 SCC 663,
• S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2007) 4 SCC 70,
• Oriental Insurance Co. Ltd v. Meena Variyal, (2007) 5 SCC 428,
• Maruti Udyog Ltd. v. Ram Lal, (2005) 2 SCC 638,
• S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) SCC 89,
• Steel Authority of India v. National Union Waterfront, (2001) 7 SCC 1,
• Special Officer , Urban Land Ceilings v. P.S. Rao, (2000) 2 SCC 451,
• Nedungadi Bank Ltd. v. K.P. Madhavankutty, (2000) 2 SCC 455.

Read Blogs:

• Suits and Criminal Complaints By and Against a Company
• “Otherwise Through an Account” in Section 142, NI Act
• Where to file Cheque Bounce Cases (Jurisdiction of Court – to file NI Act Complaint)?