Page 110 - ELT_15th August 2020_Vol 373_Part 4

444 EXCISE LAW TIMES [ Vol. 373

(i) “company” means any body corporate and includes a firm or other as-
sociation of individuals; and
(ii) “director”, in relation to a firm, means a partner in the firm.”
28. In the Negotiable Instruments Act, 1881 initially there was no pro-
vision regarding offences by Companies and by Act 66 of 1988 Section 141 was
inserted in the Negotiable Instruments Act, 1881 which provision is to the follow-
ing effect :
“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 com-
pany for the conduct of the business of the company, as well as the compa-
ny, shall be deemed to be guilty of the offence and shall be liable to be pro-
ceeded 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 com-
pany by virtue of his holding any office or employment in the Central Gov-
ernment or State Government or a financial corporation owned or con-
trolled 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 of-
fence 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.
Explanation. — For the purposes of this section, —
(a) “company” means anybody corporate and includes a firm or other as-
sociation of individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.”
29. A bare reading of Section 141 of Negotiable Instruments Act, 1881
indicates that sub-section (1) and sub-section (2) of Section 141 are pari materia to
Section 68 of FERA, 1973 which was already in the statute. This Court in S.M.S.
Pharmaceuticals (supra) had occasion to consider the requirements of Section 141.
In paragraph 4 this Court lays down following :
“4 ….. The normal rule in the cases involving criminal liability is against
vicarious liability, that is, no one is to be held criminally liable for an act of
another. This normal rule is, however, subject to exception on account of
specific provision being made in statutes extending liability to others. Sec-
tion 141 of the Act is an instance of specific provision which in case an of-
fence under Section 138 is committed by a Company, extends criminal lia-
bility for dishonour of cheque to officers of the Company. Section 141 con-
tains conditions which have to be satisfied before the liability can be ex-
tended to officers of a company. Since the provision creates criminal liabil-
ity, the conditions have to be strictly complied with. The conditions are in-
tended to ensure that a person who is sought to be made vicariously liable

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