{"id":1728,"date":"2024-04-08T16:11:19","date_gmt":"2024-04-08T10:41:19","guid":{"rendered":"https:\/\/xpertslegal.com\/blog\/?p=1728"},"modified":"2024-04-09T15:44:01","modified_gmt":"2024-04-09T10:14:01","slug":"supreme-court-holds-that-merely-because-a-person-is-a-director-of-a-company-it-is-not-necessary-that-he-is-aware-about-the-day-today-functioning-of-the-company","status":"publish","type":"post","link":"https:\/\/xpertslegal.com\/blog\/supreme-court-holds-that-merely-because-a-person-is-a-director-of-a-company-it-is-not-necessary-that-he-is-aware-about-the-day-today-functioning-of-the-company\/","title":{"rendered":"Supreme court holds that merely because a person is a director of a company, it is not necessary that he is aware about the day-today functioning of the company"},"content":{"rendered":"

SUSELA PADMAVATHY AMMA\u00a0 \u00a0 [<\/strong>APPELLANT (S)] Vs.\u00a0 <\/strong>M\/S BHARTI AIRTEL LIMITED\u00a0 \u00a0[<\/strong>RESPONDENT (S)]<\/h1>\n

CRIMINAL APPEAL Arising out of Special Leave Petition (Criminal) No.12390- 12391 of 2022<\/p>\n

(2JB, B.R. GAVAI and SANDEEP MEHTA JJ., delivered by B.R. GAVAI, J.<\/strong>)<\/p>\n

 <\/p>\n

Facts:<\/u><\/strong> The present appeals challenge the common judgment and order dated 26th April, 2022 passed by the High Court of Judicature at Madras (hereinafter referred to as \u201cHigh Court\u201d), whereby the High Court rejected the prayer for quashing of C.C. Nos. 3151 & 3150 of 2017, on the file of learned XVIII Metropolitan Magistrate, Saidapet, Chennai), in connection with the offence punishable under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881.<\/p>\n

Issue:<\/u><\/strong> Whether the director of the company is liable for the offence punishable under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881<\/a>?<\/p>\n

Arguments on behalf of counsel for appellant:<\/u><\/strong><\/p>\n

Shri Manoj V. George, learned counsel for the appellant submitted that the appellant is an aged-lady and was not involved in the day-to-day affairs of the Company. It is submitted that even in the complaint there are no averments that the appellant was in-charge of day-to-day affairs of the Company. It is further submitted that the appellant was also not a signatory to the cheque in question. It was only the accused No.2 who was the signatory to the cheque. It is, therefore, submitted that the High Court has grossly erred in not allowing the petition for quashing of criminal complaints qua the appellant.<\/p>\n

Arguments on behalf of counsel for respondent:<\/u><\/strong><\/p>\n

Shri Lakshmeesh S. Kamath, learned counsel for the respondent, on the contrary, submitted that the learned judge of the High Court has rightly, after considering the material on record, dismissed the petition for quashing of criminal complaints qua the appellant. It is submitted that the grounds raised are the defense of the accused and it can only be raised at the stage of the trial. It is, therefore, submitted that no interference is warranted in the present appeal.<\/p>\n

Held:<\/u><\/strong> The court allowed the present appeal and held that, \u201cIt was held that merely because a person is a director of a company, it is not necessary that he is aware about the day-today functioning of the company. This Court held that there is no universal rule that a director of a company is in charge of its everyday affairs. It was, therefore, necessary, to aver as to how the director of the company was in charge of day-to-day affairs of the company or responsible to the affairs of the company. This Court, however, clarified that the position of a managing director or a joint managing director in a company may be different. This Court further held that these persons, as the designation of their office suggests, are in charge of a company and are responsible for the conduct of the business of the company. To escape liability, they will have to prove that when the offence was committed, they had no knowledge of the offence or that they exercised all due diligence to prevent the commission of the offence.\u201d<\/em><\/p>\n\n","protected":false},"excerpt":{"rendered":"

SUSELA PADMAVATHY AMMA\u00a0 \u00a0 [APPELLANT (S)] Vs.\u00a0 M\/S BHARTI AIRTEL LIMITED\u00a0 \u00a0[RESPONDENT (S)] CRIMINAL APPEAL Arising out of Special Leave Petition (Criminal) No.12390- 12391 of 2022 (2JB, B.R. GAVAI and SANDEEP MEHTA JJ., delivered by B.R. GAVAI, J.)   Facts: The present appeals challenge the common judgment and order dated 26th April, 2022 passed by […]<\/p>\n","protected":false},"author":1,"featured_media":1729,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-1728","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-judgement"],"_links":{"self":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/1728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/comments?post=1728"}],"version-history":[{"count":4,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/1728\/revisions"}],"predecessor-version":[{"id":1734,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/1728\/revisions\/1734"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media\/1729"}],"wp:attachment":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media?parent=1728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/categories?post=1728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/tags?post=1728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}