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15. Before the decision of the Supreme Court in SMS Pharmaceuticals v. Neeta Bhalla (supra)(which I shall advert to and discuss in detail at the appropriate stage) the trend in case law shows parallel thinking in either direction. One line of cases indicate that once there is an imputation made to the effect that the concerned director/person imp leaded as accused was responsible for the conduct of the business of the company that would be sufficient and whether such a person was, in fact, responsible or not would be a matter of trial. At the stage of summoning when evidence is yet to be led by the parties, the High Court could not on assumption of facts come to a finding that the said person was not responsible for the conduct of the business. Some of the cases in which this approach was adopted are following:

25. The same view was taken by the High Courts of Madras, Bombay and Andhra Pradesh. The view of Andhra Pradesh High Court is reflected in Neeta Bhalla v. SMS Pharmaceuticals Ltd., Hyderabad and Another (supra), which was taken in appeal before the Supreme Court in SMS Pharmaceuticals Ltd. v. Neeta Bhalla (supra). In the case of Dr. O.P. Mehra and Ors. v. Mansi Finance (Chennai) Ltd. II (2002) BC 104 : 2001 (4) RCR (Crl.) 325, the Madras High Court held that simple bald allegations in the complaint that accused Directors are managing the accused company and were jointly and severally liable for the dishonour of the cheque would not satisfy the requirement of Section 141 of the Act. Identical view of the Bombay High Court is contained in its judgment in the case of Chaitan M. Maniar v. State of Maharashtra IV (2004) BC 584. Thus, many High Courts have taken the same view, which is now reinforced by the Supreme Court in SMS Pharmaceuticals Ltd. v. Neeta Bhalla (supra). Judgment of the Supreme Court in SMS Pharmaceuticals Ltd. v. Neeta Bhalla (supra), is, therefore, on this ground also read to mean that in addition to making bald allegation in the complaint reproducing language of Section 141(1) of the NI Act, it has to be stated as to how the accused directors/other accused persons were responsible for the conduct of the affairs of the company.

26. I may hasten to add that when the aforesaid judgments were pronounced, SMS Pharmaceuticals Ltd. (supra), had not been decided. Therefore, though the law relating to averments which are required to be made is settled in the same manner as discussed above, these observations may not be applicable in the case of Chairman or Vice-Chairman as it is specifically held in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (supra), that by their very designation, they are in charge of the affairs of the company. In the backdrop in which questions for decision were referred to the Larger Bench in SMS Pharmaceuticals Ltd. v. Neeta Bhalla (supra), and decided by it, it would be clear that the Court has held that the necessary averments which have to be made under Section 141 of the Act would be that "a clear case should be spelt out in the complaint against the person sought to be made liable". The rationale given was that "the averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial". These observations would clearly indicate that mere reproduction of the words contained in Section 141 would not suffice and something more is to be stated as only in that eventuality the person against whom the allegations are made would be able to met the case at the trial. This view is further confirmed when we find that the judgment specifically refers to many judgments of various High Courts and approves those judgments. One of these judgments is of Andhra Pradesh High Court in the case of Secunderabad Health Care Ltd. and Ors. v. Secunderabad Hospitals Pvt. Ltd. and Ors. II (1998) BC 614 : 1999 (96) CC (AP) 106. This judgment is specifically referred to in Neeta Bhalla v. SMS Pharmaceuticals Ltd. (supra), decided by the Andhra Pradesh High Court, which was the judgment in consideration before the Supreme Court in this case. In Neeta Bhalla v. SMS Pharmaceuticals Ltd. (supra), relying upon Secunderabad Health Care Ltd. (supra), the Andhra Pradesh High Court has held that the role played by each of the accused must be clearly stated in the complaint. Further, as already noted above, same is the view of not only this Court in various judgments, particulars whereof have been given above but also of Bombay High Court in Chaitan M. Maniar v. State of Maharashtra (supra), Karnataka High Court in Nucor Wires Ltd. v. HMT International Ltd. (supra), Kerala High Court in Biju Jacob v. Annie Mathew IV (2004) BC 35 : III (2004) CCR 450 : 2004 (3) RCR (Crl) 453.

28. It can, therefore, be safely concluded that the view, which is now accepted by the Supreme Court, is that mere repetition of the phraseology contained in Section 141 of the NI Act, i.e. "the accused is in charge of and responsible for the conduct of the day-to-day affairs of the company", may not be sufficient and something more is to be alleged to show as to how he was so responsible.

29. No doubt, the complainant is an outsider and may not know the internal arrangement of the company and his knowledge, viz.-a.-viz. the company has to be limited to his personal knowledge which he derives from his dealings with the company. However, at the same time from his personal knowledge which he derives from his dealings with the company he can make necessary averments regarding the persons who dealt with him. Apart from Chairman and Managing Director, who become liable in any case, in view of the ratio laid down in SMS Pharmaceuticals v. Neeta Bhalla (supra), the complainant can specifically state as to which other director dealt with him in the course of the business and in what manner. There may be a director and/or other person who dealt with him on behalf of the company in negotiating the particular deal with the complainant and/or in issuing the cheque(s) in question or in signing the documents while dealing with the complainant, depending upon the nature of business dealings between the company and the complainant. He may also be a person who had promised the complainant that the cheque(s) would be honoured on presentation. That apart, the complainant cannot be totally in dark about the affairs of the company even though he is not in hold of the internal documents of the company. Every company incorporated under the Indian Companies Act is supposed to file its annual returns with the Registrar of Companies. Balance-sheet of the company and such annual returns are public documents. The complainant can always inspect those documents available with the Registrar of Companies, which may throw light by spelling out the role the Directors of a particular company are playing. Thus, the complainant is not in a helpless situation and can gather necessary material for the purpose of attributing role to a particular director/person while arraigning him as accused persons. However, tendency is to make all Directors as accused whether they are active Directors or not. It is for this reason that observations of the Supreme Court in SMS Pharmaceuticals v. Neeta Bhalla (supra), become relevant where it is stated that since Section 141(1) of the NI Act makes such persons vicariously liable by deeming provision, conditions contained in Section 141(1) have to be strictly complied with by demonstrating that he "had a role to play in relation to the incriminating act" and further that "such a person should know what is attributed to him to make him liable". It may, however, be added here that if the complainant is able to show and there are imputation that such a person, who is Director, Manager, Secretary or other officer of the company and the offence is committed with his consent or connivance or is attributable to any neglect on his part, he can be arraigned as accused as per the provisions of Section 141(2) of the NI Act.