How the complaint has to be filed When the Payee is the company registered under the companies Act? Whether board resolution is necessary to maintain the complaint? Under Negotiable instruments Act:

How the complaint has to be filed When the Payee is the company registered under the companies Act? Whether board resolution is necessary to maintain the complaint? Under Negotiable instruments Act:

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.”

On a reading of the said provision, it is plain as day that

if a person who commits offence under Section 138 of the

Act is a company, the company as well as every person in

charge of and responsible to the company for the

conduct of business of the company at the time of

commission of offence is deemed to be guilty of the

offence. The first proviso carves out under what

circumstances the criminal liability would not be fastened.

Sub-section (2) enlarges the criminal liability by

incorporating the concepts of connivance, negligence and

consent that engulfs many categories of officers. It is worth

noting that in both the provisions, there is a ‘deemed’

concept of criminal liability.

The Apex court in the case of Aneeta Hada v. Godfather

Travels And Tours Private Limited 2012 AIR SC 2693

has catagorigally held that

 Applying the doctrine of strict construction, we are of

the considered opinion that commission of offence by the

company is an express condition precedent to attract the

vicarious liability of others. Thus, the words “as well as the

company” appearing in the section make it absolutely

unmistakably clear that when the company can be

prosecuted, then only the persons mentioned in the other

categories could be vicariously liable for the offence subject

to the averments in the petition and proof thereof. One

cannot be oblivious of the fact that the company is a juristic

person and it has its own respectability. If a finding is

recorded against it, it would create a concavity in its

reputation. There can be situations when the corporate

reputation is affected when a Director is indicted.

 In view of our aforesaid analysis, we arrive at the

irresistible conclusion that for maintaining the

prosecution under Section 141 of the Act , arraigning of a

company as an accused is imperative.”