prosecution against the director of the company merely for the reason that the director had signed the cheque shall not sustain if the company is not arraigned as an accused in the case

2)Kerala high court has held  the cheque was issued for and on behalf of a company and the company is not arraigned as an accused. Therefore, in view of the above legal position, the entire prosecution is vitiated and accordingly, the concurrent finding of conviction and sentence are liable to be set aside.

3) in your case company is named as accused but not convicted .if company is not convicted the conviction of director would be set aside 

4) file appeal against the trial court order not convicting the company 

Hi,

since company is itself a corporate body, separate legal entity and the signatories being the directors, cannot be accused of if the company is not convicted for the offence.

in a chattisgarh HC, the court held that- "referring back to the allegations and averments made in the complaint under Section 138 of Negotiable Instrument Act, though the petitioners have been described somewhere in the petition as Director in some petition for and on behalf of *** Industries Limited would make it clear that the respondents were in know of the fact that with whom they are dealing. The copy of the cheques which are produced in few of the cases would also show that the cheques were issued on behalf of the company not in the individual capacity of the petitioners. Consequently, in the complaint when the company has not been arrayed as accused, the prosecution simplicitor against the Director without making specific averments about the role played by them would not be maintainable."

Also, in a 2012 case, the SC HELD TAHT:  "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."

you can any day file an appeal against the order/judgement.

thanks.

The company is supposed to know generally as to who were in-charge of the affairs of the company.

The company is expected to allege that the persons named in the complaint are in-charge of the affairs of the company.

The burden would be on the board of directors or persons in-charge of the affairs of the company to show that they are not liable to be convicted.

The reasons for this that only the directors of the company have special knowledge of the role that they play in the company. The existence of any special circumstance that makes them not liable is something that is particularly within their knowledge and it is for them to establish in the trial to show that at the relevant point in time they were not in-charge of the affairs of the company.

You can refer to SP Mani & Mohan Diary Vs. Dr. Snehalata Elangovan of supreme court.

I think the judgment of the trial court completely overlooks s.141 of the Negotiable Instruments Act

it says that every officer of the company, 'as well as the company'.....so the latter words in colon are important...how can the director be convicted alone without the company being convicted?!!

NEGOTIABLE INSTRUMENTS ACT, 1881 Section 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:

I dont think that if you file an appeal for convicting the company as well, the SC would waive the deposit to be made by the convicted director

your appeal would say that in addition to the director the company also ought to have been convicted considering s.141 reproduced above

so in absence of the company being convicted [which would be challenged by you] the SC would all the more require the convicted director to make the deposit before his appeal can be entertained 

If company was arrained as accused and was not convicted then you need to challenge the order of trial court. Without arraining company as accused and convicting it directors cannot be convicted or made party.

Dear client I am sorry to hear that but in this case the corporate veil will be lifted and the director may be prosecuted