CRL.M.C. 1143/2019 Page 1 of 16

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 06.01.2026

Judgment pronounced on: 27.02.2026

Judgment uploaded on: 27.02.2026

+ CRL.M.C. 1143/2019 & CRL.M.A. 4453/2019

RAM KUMAR PATHAK ....Petitioner

Through: Mr. A Mishra, Mr. Ravi Pal, Mr.

Sahil and Mr. Nidish Gupta,

Advs.

versus

SHASHI DEVI & ORS. .....Respondent

Through: Mr. Mayank Mehandru, Ms.

Charu Tandon, Mr. Raghav

Tandon, Mr. Nikhil Kharaliya,

Ms. Diksha Jaspal and Mr.

Ashutosh Singh, Advs. for R-1.

CORAM:

HON'BLE DR. JUSTICE SWARANA KANTA SHARMA

JUDGMENT

DR. SWARANA KANTA SHARMA, J

1. The present petition has been filed seeking setting aside of the

order dated 28.01.2019, passed by the learned ASJ-03, Karkardooma

Courts, North-East District, Delhi [hereafter ‗Sessions Court‘] in Crl.

Revision No. 63/2018 as well as the summoning order dated 26.05.2018

passed by the learned MM, North-East District, Delhi [hereafter

CRL.M.C. 1143/2019 Page 2 of 16

‗Magistrate‘] in the complaint filed by the respondent no. 1-complainant

i.e. CC No. 749/2018, for offence under Section 138 of the Negotiable

Instruments Act, 1881 [hereafter ‗NI Act‘].

FACTUAL BACKGROUND

2. Brief facts of the case, as emerging from the complaint filed

under Section 138 of the NI Act, are that the complainant, respondent

no. 1 herein, Shashi Devi, had filed the complaint against accused no. 1

(respondent no. 2 herein) M/s Forcia Commodity Solutions OPC Pvt.

Ltd., a One Person Company, accused no. 2 (respondent no. 3 herein)

Ratna Sharma, stated to be the Director and person in control of accused

no. 1, and accused no. 3 (petitioner herein) Ram Kumar Pathak, who is

alleged to be involved in the day-to-day business affairs of accused no. 1

and acting under the instructions of accused no. 2. It is the case of the

complainant that accused nos. 2 and 3 had approached her with

representations regarding their experience and expertise in financial

management and induced her to make investments through accused no.

1, assuring safety and assured returns. Relying upon such

representations, the complainant allegedly had invested an amount of

₹6,00,000/- with the accused in the year 2015, partly in cash and partly

through cheques. It is further alleged that while an amount of

₹2,50,000/- was paid back towards partial return, the remaining amount

was not returned despite repeated requests and follow-ups. According to

the complainant, after persistent demands, a cheque bearing no. 535007

CRL.M.C. 1143/2019 Page 3 of 16

dated 30.12.2017 for a sum of ₹4,00,000/-, drawn on IndusInd Bank on

the account of accused no. 1 and signed by accused no. 2, was issued to

her towards discharge of liability. The said cheque, upon presentation,

was dishonoured on two occasions, i.e., on 02.01.2018 and again on

01.03.2018, with the remarks ―Refer to Drawer‖. Thereafter, the

complainant had issued a statutory legal notice dated 28.03.2018 calling

upon the accused persons to make payment of the cheque amount within

the prescribed period. Despite service of the said notice, the accused

persons allegedly failed to make the payment, leading to the filing of the

complaint under Section 138 of the NI Act before the learned

Magistrate.

3. The learned Magistrate, vide order dated 26.05.2018, had issued

summons against the accused persons, including the petitioner. The said

order was assailed by the petitioner before the learned Sessions Court by

way of Crl. Revision No. 63/2018, which came to be dismissed vide the

impugned order dated 28.01.2019. The proceedings before the learned

Magistrate arising out of the aforesaid complaint case were stayed by

this Court vide order dated 10.12.2019 passed in the present case.

SUBMISSIONS BEFORE THE COURT

4. The learned counsel appearing for the petitioner/accused no. 3

submits that the cheque in question was drawn on the account of

respondent no. 2–company and was admittedly signed by respondent no.

3 (accused no. 2), who is the sole Director and authorised signatory of

CRL.M.C. 1143/2019 Page 4 of 16

the company. It is contended that the petitioner is neither the drawer nor

the signatory of the cheque. It is further argued that as per the records of

the Ministry of Corporate Affairs, which are public documents, the

petitioner was neither a Director, office bearer, nor an employee of the

respondent no. 2–company. Even the complaint itself, particularly

paragraph 2 thereof, acknowledges that respondent no. 3 is the sole

Director of the company. It is thus submitted that no material has been

placed on record to prima facie show that the petitioner was in charge of

or responsible for the conduct of the business of the company. The

learned counsel submits that there are no specific averments in the

complaint demonstrating the petitioner‘s role in the day-to-day affairs of

the company. Mere bald allegations, without supporting material, are

insufficient to attract vicarious liability under Section 141 of the NI Act.

It is contended that liability under Section 138 is primarily of the drawer

of the cheque, and Section 141 can be invoked only against persons who

are Directors or officers of the company and were in charge of its

business at the relevant time. On these grounds, it is urged that the

summoning of the petitioner is erroneous and liable to be set aside.

5. Conversely, the learned counsel appearing for respondent no. 1

submits that the petitioner is vicariously liable in view of his active role

and involvement in the affairs of the accused company. It is contended

that the complaint specifically narrates the petitioner‘s role in

approaching the complainant, inducing her to invest money, handing

CRL.M.C. 1143/2019 Page 5 of 16

over the cheque, and issuing instructions regarding its presentation. It is

argued that the complaint contains sufficient averments to show that the

petitioner was in charge of and responsible for the conduct of the

business of the accused company. The petitioner‘s involvement in the

issuance of the cheque and subsequent assurances given to the

complainant, including directions for re-presentation of the cheque, are

clearly averred in the complaint. The learned counsel argues that it well-

settled by the Hon‘ble Supreme Court that liability under Section 141 of

the NI Act does not depend merely on designation, and even a person

not formally holding an office in the company may be prosecuted if the

complaint discloses that such person was in charge of and responsible

for the conduct of the company‘s affairs at the relevant time. It is thus

submitted that the learned Sessions Court has rightly held that the

petitioner‘s contentions raise triable issues and do not warrant

interference at the stage of issuance of summons. Accordingly, it is

prayed that the present petition be dismissed.

6. This Court has heard arguments addressed on behalf of the

petitioner as well as the respondent no. 1, and has pursued the material

on record.

ANALYSIS & FINDINGS

7. The issue that arises for consideration before this Court is whether

the summoning of the petitioner for the offence under Sections 138 and

CRL.M.C. 1143/2019 Page 6 of 16

141 of the NI Act calls for interference in the facts and circumstances of

the present case.

8. At the outset, it would be apposite to notice the statutory scheme

of Sections 138 and 141 of the NI Act, which deal with the offence of

dishonour of cheque and vicarious liability in cases where the drawer is

a company. Section 138 and 141 of NI Act are set out below:

“138. Dishonour of cheque for insufficiency, etc., of funds in

the account.—

Where any cheque drawn by a person on an account maintained

by him with a banker for payment of any amount of money to

another person from out of that account for the discharge, in

whole or in part, of any debt or other liability, is returned by the

bank unpaid, either because of the amount of money standing to

the credit of that account is insufficient to honour the cheque or

that it exceeds the amount arranged to be paid from that account

by an agreement made with that bank, such person shall be

deemed to have committed an offence and shall, without

prejudice to any other provision of this Act, be punished with

imprisonment for a term which may be extended to two years‘,

or with fine which may extend to twice the amount of the

cheque, or with both:

Provided that nothing contained in this section shall apply

unless—

(a) the cheque has been presented to the bank within a period of

six months from the date on which it is drawn or within the

period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the

case may be, makes a demand for the payment of the said

amount of money by giving a notice; in writing, to the drawer

of the cheque, within thirty days of the receipt of information by

him from the bank regarding the return of the cheque as unpaid;

and

(c) the drawer of such cheque fails to make the payment of the

said amount of money to the payee or, as the case may be, to the

CRL.M.C. 1143/2019 Page 7 of 16

holder in due course of the cheque, within fifteen days of the

receipt of the said notice.

Explanation.—For the purposes of this section, ―debt of other

liability‖ means a legally enforceable debt or other liability

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.‖

CRL.M.C. 1143/2019 Page 8 of 16

9. Section 141 of the NI Act envisages vicarious liability and is

divided into two distinct parts, i.e. sub-section (1) and sub-section (2),

each operating in different factual scenarios. The distinction between the

two provisions has been explained by the Hon‘ble Supreme Court in

S.P. Mani & Mohan Dairy v. Snehalatha Elangovan: (2023) 10 SCC

685, wherein it has been held that while sub-section (1) fastens liability

on persons who are in charge of and responsible for the conduct of the

business of the company, irrespective of their designation, sub-section

(2) applies where the offence is committed with the consent, connivance

or neglect of a director, manager, secretary or other officer of the

company, with the burden of specifically pleading in the complaint and

proving such elements resting upon the complainant. The relevant

observations are as under:

―26. By virtue of the provisions of sub­section (1) of Section

141, the guilt for the offence and the liability to be prosecuted

and punished shall be extended to every person who, at the time

the offence was committed, was in charge of and was

responsible to the company for the conduct of its business;

irrespective of whether such person is a director, manager,

secretary or other officer of the company. It would be for such

responsible person, in order to be exonerated in terms of the

first proviso, to prove that the offence was committed without

his knowledge or despite his due diligence.

27. Under the separate provision of sub­section (2), if it is

proved that the offence was committed with the consent or

connivance of or was attributable to the neglect on the part of

any director, manager, secretary or other officer of the

company, such person would also be deemed to be guilty for

that offence. Obviously, the burden of alleging and proving

consent, connivance or neglect on the part of any director, etc.

would rest upon the complainant. The non obstante clause with

CRL.M.C. 1143/2019 Page 9 of 16

which the sub­section (2) opens indicate that the deeming

provision is distinct and different from the deeming provision in

sub­section (1) in which the office or designation of the person

in charge of and responsible to the company for the conduct of

its business is immaterial.

28. While the essential element for implicating a person under

sub­section (1) is his or her being in charge of and responsible

to the company in the conduct of its business at the time of

commission of the offence, the emphasis in sub­section (2) is

upon the holding of an office and consent, connivance or

negligence of such officer irrespective of his or her being or not

being actually in charge of and responsible to the company in

the conduct of its business. Thus, the important and

distinguishing feature in sub­section (1) is the control of a

responsible person over the affairs of the company rather than

his holding of an office or his designation, while the liability

under sub­section (2) arises out of holding an office and

consent, connivance or neglect.

29. While all the persons covered by sub­section (1) and sub­

section (2) are liable to be proceeded against and also punished

upon the proof of their being either in charge of and responsible

to the company in the conduct of its business or of their holding

of the office and having been guilty of consent, connivance or

neglect in the matter of commission of the offence by the

company, the person covered by sub­section (1) may, by virtue

of the first proviso, escape only punishment if he proves that the

offence was committed without his knowledge or despite his

due diligence.‖

10. The learned counsel appearing for the complainant has contended

that even if the petitioner does not hold any designation in the accused

company, he can still be made vicariously liable under Section 141 of

the NI Act on account of him being responsible to the accused company

for conduct of its business and his alleged involvement in its day-to-day

affairs.

CRL.M.C. 1143/2019 Page 10 of 16

11. To appreciate this contention in the facts of the present case, it is

necessary to examine the nature of averments required in a complaint so

as to justify the summoning of a person by invoking Section 141 of the

NI Act. The law in this regard stands well settled.

12. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla: (2005) 8 SCC

89, a three-Judge Bench of the Hon‘ble Supreme Court has held that it is

mandatory for a complaint under Section 141 of the NI Act to

specifically aver that, at the time of commission of the offence, the

person sought to be made liable was in charge of and responsible for the

conduct of the business of the company. Such an averment is an

essential requirement and, in its absence, the requirements of Section

141 cannot be said to be satisfied. The observations of the Hon‘ble

Supreme Court are extracted hereunder:

―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

CRL.M.C. 1143/2019 Page 11 of 16

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.‖

13. Similarly, in Ashok Shewkramani v. State of Andhra Pradesh:

(2023) 8 SCC 473, the Hon‘ble Supreme Court emphasised that Section

141 constitutes an exception to the general rule against vicarious

liability in criminal law and, therefore, must be strictly construed. It was

held that bald assertions such as a person being involved in ―day-to-day

affairs‖ or ―managing the company‖ are, by themselves, insufficient to

satisfy the statutory requirement of being ―in charge of and responsible

for the conduct of the business of the company‖ at the relevant time. It

was held as under:

―21. Section 141 is an exception to the normal rule that there

cannot be any vicarious liability when it comes to a penal

provision. The vicarious liability is attracted when the

ingredients of sub-section 1 of Section 141 are satisfied. The

Section provides that every person who at the time the offence

was committed was in charge of, and was responsible to the

Company for the conduct of business of the company, as well

CRL.M.C. 1143/2019 Page 12 of 16

as the company shall be deemed to be guilty of the offence

under Section 138 of the NI Act.

22. In the light of sub-section 1 of Section 141, we have

perused the averments made in the complaints subject matter of

these three appeals. The allegation in paragraph 1 of the

complaints is that the appellants are managing the company

and are busy with day to day affairs of the company. It is further

averred that they are also in charge of the company and are

jointly and severally liable for the acts of the accused No.1

company. The requirement of sub-section 1 of Section 141 of

the NI Act is something different and higher. 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. For

example, in a given case, a manager of a company may be

managing the business of the company. Only on the ground that

he is managing the business of the company, he cannot be roped

in based on sub-section 1 of Section 141 of the NI Act.

23. The second allegation in the complaint is that the appellants

are busy with the day-to-day affairs of the company. This is

hardly relevant in the context of sub-section 1 of Section 141 of

the NI Act. The allegation that they are in charge of the

company is neither here nor there and by no stretch of the

imagination, on the basis of such averment, one cannot

conclude that the allegation of the second respondent is that the

appellants were also responsible to the company for the conduct

of the business. 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.‖

14. From the aforesaid decisions, it can be safely concluded that for

implicating a person under Section 141(1) of the NI Act, the complaint

must contain specific averments demonstrating that such person was, at

CRL.M.C. 1143/2019 Page 13 of 16

the time of commission of the offence, both in charge of and responsible

for the conduct of the business of the company. The emphasis is not

merely on participation or involvement, but on control and responsibility

in relation to the business of the company.

15. At the same time, as held by the Hon‘ble Supreme Court in

HDFC Bank Limited v. State of Maharashtra: (2025) 9 SCC 653,

while a verbatim reproduction of the statutory language of Section

141(1) of NI Act is not mandatory, the substance of the allegations must

clearly indicate that the accused sought to be prosecuted was responsible

for, or in control of the day-to-day business affairs of the company.

16. At this stage, it would be apposite to examine the averments made

in the complaint to ascertain whether the statutory requirements of

Section 141 of the NI Act are satisfied qua the petitioner. Paragraph 2 of

the complaint contains the foundational averments regarding the role of

the accused persons, wherein it has been stated as under:

―2. That the Accused No. 1 is a Single Person Company being

incorporated, owned, managed and controlled by the Accused

No. 2. That the Accused No. 2 is also holding position of

Director of Accused No. 1 and also believed to be absolute

stake holder of Accused No. 1. Accused No. 2 is personally

involved in business activities of Accused No. 1. That the

Accused No. 3 is involved in day to day business activities of

Accused No. 1 and is acting under the instructions of

Accused No. 2. That the Accused No. 2 & 3 are personally

involved and liable for all the business activities, affairs,

management, control and operation of the Accused No. 1.

That the Accused No. 2 & 3 as a matter of fact are carrying out

their personal activities under the veil of Accused No. 1. The

printout of the status of Accused No. 1 being One Person

CRL.M.C. 1143/2019 Page 14 of 16

Company and Accused No. 2 as Director of Accused No. 1 has

been verified from the website of Ministry of Corporate Affairs

and its true printout as obtained is attached herewith.‖

(emphasis supplied)

17. A perusal of the aforesaid paragraph shows that while accused no.

2 has been described as the sole Director of accused no. 1-company, the

only allegation against the petitioner (accused no. 3) is that he was

―involved in the day-to-day business activities‖ of the company and was

―acting under the instructions of accused no. 2‖. Apart from these

assertions, the complaint contains certain common allegations against

accused nos. 2 and 3 regarding the transaction in question, including

approaching the complainant, inducing her to invest money and handing

over of the cheque.

18. However, even on a plain reading of the complaint as a whole, the

necessary averments to attract vicarious liability under Section 141(1) of

the NI Act are conspicuously absent. There is no specific assertion that

the petitioner was, at the relevant time, in charge of and responsible for

the conduct of the business of the accused company. On the contrary,

the complaint itself indicates that the petitioner was ―acting under the

instructions of‖ accused no. 2, who is admittedly the sole Director of the

company. This Court is of the opinion that such averments, even in

substance, do not meet the statutory threshold contemplated under

Section 141 of the NI Act.

CRL.M.C. 1143/2019 Page 15 of 16

19. It is also an admitted position that accused no. 1 is a One Person

Company and accused no. 2 is its sole Director. The petitioner is not a

Director of the said company. There is no averment, nor any material

placed on record by the complainant, to indicate that the petitioner held

any office or position whatsoever in the accused company, even as an

employee. Therefore, precisely, the petitioner herein has no role or

status in the accused company.

20. Even if the allegations in the complaint are assumed to be true for

the sake of argument, the petitioner‘s alleged role in accompanying

accused no. 2, inducing the complainant, or handing over the cheque –

whether as a friend, associate or agent – would not, by itself, be

sufficient to attract liability under Section 141(1) of the NI Act. The said

provision applies only to persons who are in charge of and responsible

for the conduct of the business of the company, and the complaint must

contain specific averments to that effect, either expressly or at least in

substance. Such averments are clearly lacking in the present case qua

the petitioner herein.

21. In view of the above discussion, the continuation of proceedings

against the petitioner cannot be sustained. Accordingly, the complaint,

insofar as it relates to the petitioner, is liable to be quashed.

22. The present petition is therefore allowed, and the impugned

summoning order and the complaint, insofar as they relate to the

petitioner, are hereby quashed and set aside.

CRL.M.C. 1143/2019 Page 16 of 16

23. This judgment however shall have no bearing on the merits of the

case in respect of the other accused persons.

24. The judgment be uploaded on the website forthwith.

DR. SWARANA KANTA SHARMA, J

FEBRUARY 27, 2026/

T.D.