Bombay High Court
KIRAN KOPPULAversusPIGGY VENTURES PVT LTD AND 3 ORS
- Disposal
- Rule made absolute
Holding
The complaint does not meet the statutory requirements of Section 141 of the Negotiable Instruments Act, so the petitioner cannot be held vicariously liable and the process issued against him is invalid.
Summary
The petitioner, Kiran Koppula, a director of Da Urban Nomads Community Pvt Ltd, was named in four criminal cases under Section 138 of the Negotiable Instruments Act for the dishonour of cheques issued by M/s Piggy Ventures Pvt Ltd in connection with a share‑purchase agreement. Koppula contended that he was not a signatory to the cheques, had only a brief tenure as additional director, and that the complaint failed to allege that he was in charge of or responsible for the company’s business as required by Section 141 of the NI Act. The respondents argued that Koppula held a key managerial position and that the complaint, read as a whole, sufficed to invoke vicarious liability. The Court examined the statutory language of Section 141 and precedent requiring specific averments that the accused was in charge of and responsible for the business at the time of the offence. Finding the complaint silent on Koppula’s role and lacking the requisite particulars, the Court held that process could not be issued against him. Consequently, the writ petitions seeking quashment of the criminal proceedings were allowed and the rule was made absolute.
Issues considered
- Whether the complaint against the petitioner satisfies the requirements of Section 141 of the Negotiable Instruments Act to deem a director vicariously liable for a cheque‑bounce offence.
- Whether the issuance of process against the petitioner under Section 138 is valid in the absence of specific averments of his charge and responsibility over the company’s business.
- Whether the petitioner’s brief tenure as director and lack of signatory role preclude criminal liability.
Legislation cited
- Companies Act, 2013
- Negotiable Instruments Act, 1881 — s. 138, 141
Subjects
- Negotiable Instruments Act
- Section 138
- Section 141
- vicarious liability
- director liability
- cheque bounce
- criminal procedure
- writ petition
- quashment
- Companies Act
Judgment
2026:BHC-GOA:1744
(1) wpcr-82-2025 & ors..odt
IN THE HIGH COURT OF BOMBAY AT GOA
CRIMINAL WRIT PETITION NO.82 OF 2025
AND
CRIMINAL WRIT PETITION NO.83 OF 2025
AND
CRIMINAL WRIT PETITION NO.84 OF 2025
AND
CRIMINAL WRIT PETITION NO.85 OF 2025
KIRAN KOPPULA, s/o
Bhagavan Koppula, Aged 47 years,
R/o. Ornella, 206, Vasant Oasis,
Makwana Road, Marol, Near Keys Hotel,
Andheri East, Mumbai, Mumbai Suburban,
Maharashtra- 400059,
Having his Office at Bungalow No. 5,
Liberty Phase-I, Koregaon Park,
Opposite Lane 6, Pune,
Maharashtra- 411001. ...PETITIONER
VERSUS
1. M/S PIGGY VENTURES PRIVATE LIMITED,
having its Registered Office at Flat no. FF-18,
Cunchelim, Mapusa, Bardez, Goa represented
by its Directors :
1a. Jose Ryan Agnelo Gomes Prazers
alias Ryan Prazers, Major in age,
R/o. House no. 14/388/F,
Vivenda Prazers, Next to
Landscape Shire, Caranzalem,
Panaji, Goa- 403002.
1b. Jose Ralph De Fatima Gomes Prazers,
Major in age, R/o.House no. 14/388/F,
Vivenda Prazers, Next to
Landscape Shire, Caranzalem,
Panaji, Goa- 403002.
2. DA URBAN NOMADS COMMUNITY PVT. LTD.
Having its Registered Office at
Bungalow No. 5, Liberty Phase-1,
Koregaon Park, Opposite Lane-6,
Pune, Maharashtra- 411001.
Represented herein by its Directors.
3. Navin Kishore, S/o. Ram Kishore Singh,
Indian National, Major in Age,
(2) wpcr-82-2025 & ors..odt
R/o. Flat No. C-602, Manglik Apartments,
Plot No. 25, Dwarka Sec-6,
South West Delhi, Dwarka,
Sec-6, Delhi- 11075.
4. Nakul Singh Purohit,
S/o. Ajit Singh Purohit,
Indian National, Major in Age,
R/o. GH1, Bhagat Ki Kothi
Extension Scheme, New Pali Road,
Jodhpur, Jodhpur, Rajashtan- 342005. ...RESPONDENTS
…
Mr. Ajay Menon, Advocate for Petitioner.
Mr. Amogh Prabhudessai, Advocate for Respondent No.1.
…
CORAM : S. G. CHAPALGAONKAR, J.
RESERVED ON :13th AUGUST, 2026.
PRONOUNCED ON :28th AUGUST, 2026.
JUDGMENT:-
1. Rule. Rule made returnable forthwith. With consent of parties,
matters are heard finally at admission stage.
2. The petitioner seeks quashment of Criminal Case
Nos.OA/NIA/398/2022/D, OA/NIA/399/2022/D, OA/NIA/46/2023/D
and OA/NIA/47/2023/D respectively and also takes exception to orders
dated 29.12.2022, 21.08.2023 and 27.03.2023 respectively passed by
Judicial Magistrate Junior Division ‘D’ Court at Panaji/Merces, thereby
issuing process against petitioner for offence punishable under Section
138 of Negotiable Instruments Act, 1881 (hereinafter referred to as ‘NI
Act’).
3. The respondent no.1 is company registered under Companies Act
through its Directors namely Jose Ryan Agnelo Gomes Prazeres and
(3) wpcr-82-2025 & ors..odt
Jose Ralph De Fatima Gomes Prazeres. The respondent no.2 is also
registered company under Companies Act. It was incorporated by
respondent nos.3 and 4 in year 2019. The respondent nos.1 and 2
entered into an agreement dated 01.06.2021 for share purchase and
acquisition of business. The respondent nos.2 to 4 agrees to acquire
80% shares holding of equity of respondent no.1 Company. The terms
were settled on 01.05.2021, which were subsequently altered and
modified by final term-sheet signed on 07.05.2021. As per final term-
sheet dated 07.05.2021, respondent nos.2 to 4 agreed to purchase 80%
of share holding of respondent no.1 Company for acquisition price of
Rs.80,00,000/- out of which sum of Rs.3,00,000/- was paid at the time
of signing of agreement and balance was to be paid as per payment
schedule of 11 installments. The particulars of cheques which are
subject matter of complaints are given as under:
Dated Return Amount Cheque O.A. No. Complaint WPCR
Memo No. Filed On No.
Dated
25.06.2022 23.09.2022 10,00,000 000118 OA/398/2022 04.11.2022 82/2025
22.09.2022 23.09.2022 10,00,000 000119 OA/399/2022 04.11.2022 83/2025
30.10.2022 02.01.2023 10,00,000 000120 OA/46/2023 15.02.2023 84/2025
30.11.2022 02.01.2023 15,00,000 000121 OA/47/2023 15.02.2023 85/2025
4. It is contention of respondents that respondent/accused failed to
follow payment schedule and requested respondent no.1 to not to
deposit cheque assuring that they will make good of same by NEFT, but
they failed to effect payment. The respondent no.1 deposited cheque,
but same was dishonored on account of insufficiency of funds in bank
(4) wpcr-82-2025 & ors..odt
account of respondent no.2. The respondent no.1 addressed legal notice
calling upon accused to pay cheque amount. Despite service of notice,
accused failed to make good of payment mentioned in legal demand
notice. As such, accused committed an offence punishable under
Section 138 of NI Act. The complaint stipulates that upon being
aggrieved by act and omission of accused and suffering due to non-
payment of cheque, respondent no.1 filed complaint under Section 138
of NI Act. The complaint was presented in Court of Judicial Magistrate
First Class, Panaji. The JMFC passed impugned order of issuance of
process. Hence, this Writ Petition.
5. Mr. Ajay Menon, learned Advocate appearing for petitioner
submits that agreement for share purchase and acquisition of business is
entered into between Da Urban Nomads Community Private Limited
(DUNCPL) through then Directors i.e. respondent nos.3 and 4. On
01.06.2021 signing amount of Rs.3,00,000/- was paid and 10 additional
post dated cheques for amount varying from Rs.5,00,000/- to
15,00,000/- were given by respondent no.2 through respondent no.3 to
respondent no.1. On 17.03.2022, petitioner was appointed as additional
Director of respondent no.2 Company. On 30.09.2022, he was
appointed as Director of Company. The petitioner is neither signatory
to cheque nor averments in plaint specifies his role depicting that he was
in-charge or was responsible to company for conduct of business.
However, impugned order issuing process under Section 138 of N.I. Act
(5) wpcr-82-2025 & ors..odt
is mechanically passed. He would submit that petitioner had brief
tenure as additional Director from 17.03.2022 to 27.06.2023 and brief
tenure as Director from 30.09.2022 to 27.06.2023. The petitioner did
not perform any executive function nor he was responsible for day to
day management of affairs of respondent no.2 Company. The complaint
did not disclose specific averments qua petitioner nor does it attribute
specific role in respect of cheques in question. Relying upon
observation of this Court in case of Padmakar Dattatray Matkar Vs.
Malani Combines and Others1 and observation of Supreme Court in
cases of Kamalkishor Shrigopal Taparia Vs. India Ener-Gen Private
Limited and Another2 and K. S. Mehta Vs. Morgan Securities and
Credits Private Limited3 he submits that criminal liability cannot be
fastened upon every person associated with company. Section 141 of
N.I. Act has to be strictly complied with and person upon whom such
liability is sought to be fastened must know what is being attributed to
him. It would not be sufficient to make bald cursory statement in
complaint that Director is in charge of and responsible to company for
conduct of business of company without anything more as to role of
Director. By inviting attention of this Court to impugned order Mr.
Menon submits that requirements of Section 141 of N.I. Act are not
considered while issuing process as against petitioner.
1 2025 SCC OnLine Bom 1910.
2 (2025) 7 SCC 393.
3 (2025) 7 SCC 615.
(6) wpcr-82-2025 & ors..odt
6. Per contra, Mr. Amogh Prabhudesai, learned Advocate appearing
for respondent no.1, submits that present petition takes exception to
order of issuance of process dated 29.12.2022, whereas present petition
has been filed after a lapse of nearly three years, despite availability of
an alternate remedy. He would submit that petitioner herein was
holding key managerial position in respondent no.2 Company. The
respondent no.1 received sum of Rs.15,00,000/- in furtherance to
agreement for share purchase and acquisition of business dated
01.06.2021, out of which sum of Rs.10,00,000/- was received from
petitioner’s personal account. The petitioner was instrumental in
running affairs of respondent no.2. There are sufficient averments in
complaint to suggest that all three Directors/accused persons were
responsible in entering into share purchase agreement and issuance of
cheques. The petitioner had preferred application for discharge, which
has been dismissed vide order dated 13.12.2023. Relying upon
observations of Supreme Court in case of Ashutosh Ashok
Parasrampuriya and Another Vs. Gharrkul Industries Private Limited
and Others4 he submits that complaint as a whole needs to be
considered, if accused persons were Director of Company and
responsible for its business, it may not be proper to split while reading
complaint so as to come to conclusion that allegations as a whole are
not sufficient to fulfill requirement of Section 141 of NI Act. By relying
upon observation of Supreme Court in case of N. Rangachari Vs.
4 (2023) 14 SCC 770.
(7) wpcr-82-2025 & ors..odt
Bharat Sanchar Nigam Limited5 it is submitted that when cheque
issued by company is dishonoured, complainant is expected only to be
aware generally of who are in-charge of affairs of company and it would
not be reasonable to expect him to know whether person who signed
cheque was instructed to do so or whether he has been deprived of his
authority to do so when he actually signed cheque. Once averments in
complaint are sufficient to make out element of offence under Section
138 of NI Act, burden is on Board of Directors or Officers in-charge of
affairs of company to show that they are not liable to be convicted. Any
special circumstance that makes them not liable is something that is
peculiarly within their knowledge and it is for them to establish at trial
such a restriction or to show that at the relevant time they were not in-
charge of affairs of the company. By relying upon observations of
Supreme Court in case of HDFC Bank Limited Vs. State of
Maharashtra and Anr.6 he submits that if substance of allegation made
in complaints fulfill requirements of Section 141 of NI Act, complaint
has to proceed and is required to be tried with. While construing
complaint, hypertechnical approach should not be adopted and laudable
object of preventing bouncing of cheques and sustaining credibility of
commercial transactions had to be borne-in-mind.
7. Having considered submissions advanced by learned Advocates
appearing for respective parties, core issue that arises for consideration
5 (2007) 5 SCC 108.
6 2025 INSC 759.
(8) wpcr-82-2025 & ors..odt
before this Court is whether averments in complaint are sufficient to
issue process against petitioner or prosecute petitioner for offence
punishable under Section 138 read with 141 of NI Act. Careful reading
of complaint depicts that initially agreement for share purchase and
acquisition of business was entered into between respondent no.1 and
respondent no.2 through Directors i.e. respondent nos.3 and 4. The
petitioner was not in picture as office bearer or Director of respondent
no.2 Company. He is not signatory to agreement or cheques issued in
pursuance to agreement. First time on 17.03.2022 he has been
appointed as Director of respondent no.2 Company. The cheques in
question were presented on 25.06.2022 and it was returned with remark
as ‘insufficient funds’ on 23.09.2022. The averments in complaint
merely state, in general terms, that accused persons failed to adhere to
agreed installment payment schedule and that advance cheque issued by
accused pursuant to agreement came to be dishonoured. It is further
averred that despite service of demand notice, accused persons failed to
make payment of cheque amount within stipulated notice period. In
entire complaint, there is no particulars attributions as to role of
petitioner in day to day business of Company. Section 141 of NI Act
reads thus:
“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
(9) wpcr-82-2025 & ors..odt
well as the company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded 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 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 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 offence 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 any body corporate and includes
a firm or other association of individuals; and
(b) “director”, in relation to a firm, means a partner in
the firm.”
8. Plain reading of aforesaid provision indicates that in case of
offences by Company, every person who, at the time the offence was
committed, was in charge of, and was responsible to company for
conduct of business of company, shall be deemed to be guilty of offence
and shall be liable to be proceeded against. Sub-clause (2) of Section
141 states that notwithstanding anything contained in sub-section (1), in
(10) wpcr-82-2025 & ors..odt
case of offence by Company, once it is proved that the offence has been
committed with the consent or connivance of any director, manager,
secretary or other officer of company, such director, manager, secretary
or other officer, shall also be deemed to be guilty of that offence and
liable to be proceeded against.
9. In case of Hitesh Verma Vs. Health Care at Home India Private
Limited and Others7, Supreme Court observed in paragraph no.4 as
under:
“4. There are twin requirements under sub-section (1) of
Section 141 of the 1881 Act. In the complaint, it must be
alleged that the person, who is sought to be held liable by
virtue of vicarious liability, at the time when the offence was
committed, was in charge of, and was responsible to the
company for the conduct of the business of the company. A
Director who is in charge of the company and a Director who
was responsible to the company for the conduct of the
business, are two different aspects. The requirement of law is
that both the ingredients of sub-section (1) of Section 141 of
the 1881 Act must be incorporated in the complaint.
Admittedly, there is no assertion in the complaints that the
appellant, at the time of commission of the offence, was in
charge of the business of the company. Therefore, on a plain
reading of the complaints, the appellant cannot be prosecuted
with the aid of sub-section (1) of Section 141 of the 1881 Act.”
10. Similarly, in case of Kamalkishor Shrigopal Taparia (supra),
Supreme Court laid down following principles:
“39. From the above discussion, the following principles
emerge:
(i) The primary responsibility is on the complainant to make
specific averments as are required under the law in the
complaint so as to make the accused vicariously liable. For
fastening the criminal liability, there is no presumption that
every Director knows about the transaction.
7 (2025) 7 SCC 623.
(11) wpcr-82-2025 & ors..odt
(ii) Section 141 does not make all the Directors liable for the
offence. The criminal liability can be fastened only on those
who, at the time of the commission of the offence, were in charge
of and were responsible for the conduct of the business of the
company.
(iii) Vicarious liability can be inferred against a company
registered or incorporated under the Companies Act, 1956 only
if the requisite statements, which are required to be averred in
the complaint/petition, are made so as to make the accused
therein vicariously liable for offence committed by the company
along with averments in the petition containing that the accused
were in charge of and responsible for the business of the
company and by virtue of their position they are liable to be
proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded
and proved and not inferred.
(v) If the accused is a Managing Director or a Joint Managing
Director then it is not necessary to make specific averment in
the complaint and by virtue of their position they are liable to be
proceeded with.
(vi) If the accused is a Director or an officer of a company who
signed the cheques on behalf of the company then also it is not
necessary to make specific averment in the complaint.
(vii) The person sought to be made liable should be in charge of
and responsible for the conduct of the business of the company
at the relevant time. This has to be averred as a fact as there is
no deemed liability of a Director in such cases.”
11. In case of K. S. Mehta (supra), Supreme Court reiterated
principles laid down in case of Hitesh Verma (supra) and observed that
complaints lacking specific averments, that establish direct nexus
between financial transactions in question on involvement of accused in
company’s financial affairs, accused cannot be held vicariously liable
under Section 141 of NI Act.
(12) wpcr-82-2025 & ors..odt
12. In case of HDFC Bank Limited (supra) Supreme Court relying
upon observations in case of Monaben Ketanbhai Shah and Another
vs. State of Gujarat and Others8, held that if substance of allegations
made in complaint fulfills requirements of Section 141, complaint has to
proceed and is required to be tried with. Further, while construing
complaint, hyper-technical approach should not be adopted and laudable
object of preventing bouncing of cheques and sustaining credibility of
commercial transactions had to be borne-in-mind.
13. The gamut of aforesaid expositions of law makes it crystal clear
that Director in Company cannot be deemed to be in-charge and
responsible for Company for conduct of its business, unless requirement
of Section 141 of NI Act is complied with and factual backdrop to make
such requirement is specifically averred in complaint. In present case,
averments in complaint are absolutely silent so far as role of petitioner
to make out requirement under Section 141 of NI Act. In wake of fact
that petitioner was neither party to agreement nor he is signatory to
cheque, merely because he was appointed as additional Director at the
time of presentation / dishonored of cheque, in absence of specification
as to his role in Company, he cannot be prosecuted for offence under
Section 138 of NI Act. Pertinently, complaint is absolutely silent as to
when petitioner become Director of Company or as to what role he had
in day to day business of Company.
8 (2004) 7 SCC 15.
(13) wpcr-82-2025 & ors..odt
14. Perusal of impugned orders dated 29.12.2022, 21.08.2023 and
27.03.2023 respectively, are also silent as to requirement of Section 141
of NI Act, although complaint is filed against Company alleging
petitioner to be Director. In this backdrop, observations of Supreme
Court in case of HDFC Bank Limited (supra) would not assist cause of
respondent. In that case, there were specific averments made against
accused that he was responsible for company’s day to day affairs and
management. In that case, Supreme Court further observed that accused
had granted sanction letter and performance guarantee in pursuance to
participation in process for grant of credit loan facility. In those facts,
Supreme Court observed that complaint as a whole to be looked into. In
present case, complaint is bereft of material particulars. Even upon
reading complaint as a whole alongwith documents annexed thereto,
there is nothing to gather role of petitioner in commission of offence
and for issuance of process.
15. In result, Writ Petitions are allowed in terms of prayer Clause (A).
16. Rule is made absolute in above terms.
(S. G. CHAPALGAONKAR)
JUDGE
Devendra/August-2026
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