IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE FIFTH DAY OF AUGUST TWO THOUSAND AND TEN PRESENT HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.7858 OF 2007 Between: Savitha Spinning Mills Pvt. Ltd. & 3 others … PETITIONERS And The State of A.P. & another … RESPONDENTS This Court made the following: HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.7858 OF 2007 ORDER: 1. The petitioners 1 to 4/A1 to A4 are accused of offence punishable under Section 138 of the Negotiable Instruments Act (for short, the Act) in C.C.No.176 of 2007, on the file of the IV Additional Judicial Magistrate of the I Class, Guntur. 2. A1 is the company. A2 is Chairman and Managing Director of A1. A3 and A4 are stated to be directors in A1. The dishonoured cheques were drawn by A2 as Chairman cum Managing Director of A1 on A1’s account. 3. The petitioner’s counsel contended that the cheques were drawn in favour of M/s.Seetha Rama Spinning Mills and that the cheques were presented for encashment by M/s.Seetha Rama Spinning Mills and that no statutory notice was issued by M/s.Seetha Rama Spinning Mills before filing the complaint in the lower Court. In the notice got issued through an advocate, it was stated that the said notice was being issued under instructions of M/s.Sai Ram Syndicate, Guntur. The said mistake was realized by the complainant and in the complaint, it is averred that to clarify the same, rejoinder notice was issued after receiving reply from A1 and A2. It is a matter for evidence to find out as to how the mistake in mentioning name of M/s.Sai Ram Syndicate, Guntur, came into the notice instead of M/s.Seetha Rama Spinning Mills. This Court, particularly, having regard to the clarifications said to have been made in the rejoinder notice, cannot go into the said factual aspect in this petition filed under Section 482 Cr.P.C. 4. Secondly, it is contended by the petitioner’s counsel that insofar as A3 and A4 are concerned, the complaint does not contain necessary averments required to be made as per Section 141 of the Act. In S.M.S. PHARMACEUTICALS LTD. VS. NEETA BHALLA[1], it was held that a director does not automatically become vicariously liable for offence committed by the company and that it is to be averred in the complaint that the person proceeded against was in charge of and responsible to the company for conduct of its business. Following the path laid down by the Supreme Court, this Court also in SHANMUGHA SUNDERA RAJA VS. STATE OF A.P.[2], and also in unreported decision in Crl.P.No.7865 of 2007 dated 08.07.2010 decided on the same lines of S.M.S. PHARMACEUTICALS LTD. The complaint conspicuously lacks necessary above averments under Section 141 of the Act in order to mulct A3 and A4 with liability under Section 138 of the Act. Hence, A3 and A4 cannot be allowed to be prosecuted for this offence. 5. In the result, the petition is partly allowed quashing proceedings in C.C.No.176 of 2007, on the file of IV Additional Judicial Magistrate of the I Class, Guntur, insofar as the petitioners 3 and 4/A3 and A4 are concerned. The petition is partly dismissed insofar as the petitioners 1 and 2/A1 and A2 are concerned. ______________________________ SAMUDRALA GOVINDARAJULU, J August 05, 2010 KL HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.7858 OF 2007 August 05, 2010 KL [1] (2007) 4 Supreme Court Cases 70 [2] 2010 (1) ALT (Crl.) 363 (A.P.)