Short essay on the offences made by companies in India

If the person committing an offence under the foretasted provisions is a company, the company itself as well as every per­son like the Managing Director, Executive Director or Finance Director of the company who was in charge of, and was responsible to the company for the conduct of the business of the company, shall be deemed to be guilty of of­fence and shall be liable to be proceeded against and punished accordingly.

Again, if it is proved that the offence was committed with the consent or con­nivance of, or was attributable to the neglect on the part of, any director, man­ager, secretary or other officer of the company, such person would also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

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But a person will not be liable in a case where he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent that commission of such offence.

It may be noted that any person who is nominated as a director of the 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 or State Government shall not be liable for prosecution under the above provisions.

When a company commits an offence of cheque bouncing, its liability is joint and not several. Without impleading its directors or officers who are re­sponsible for the conduct of business, a company alone cannot be prosecuted.

On the contrary, the director can be prosecuted without making a company party to the prosecution. A complaint against the officer who has issued the dishonoured cheque on behalf of the company is maintainable and it cannot be contended that the complaint should have been filed against the company also (Bhaskar vs Muthusamy).

When a person is not a director at the time of issue of cheque but is a director at the time of dishonour, he is liable for the offence (K. Shunmugam vs Purushottamlaf).

When a person who were directors on the date of issue of the cheque but resigned the office of directorship before notice of dishonour was issued by the payee, they were held liable to be pro­ceeded against (Ashwin C. Muthiah vs Multipack).