Template pleadings and bald statutory reproductions are insufficient to establish vicarious liability of non-signatory directors.

The Opposite Party filed a complaint under Sections 138/141 of the Negotiable Instruments (NI) Act against a company and its directors, alleging that four cheques totaling ₹36,00,000.00 were dishonored due to "insufficient funds".

The petitioners, arrayed as Accused Nos. 2, 4, and 5, are "Whole-Time Directors" but were not signatories to the cheques.

The Learned Metropolitan Magistrate took cognizance and issued process on April 6, 2024, after conducting a perfunctory inquiry under Section 202 Cr.P.C.

The petitioners moved the High Court to quash the proceedings, arguing that the complaint lacked specific allegations regarding their individual roles and that they could not be held vicariously liable based on "template pleadings".

1. Whether a "bald statement" in a complaint replicating the statutory language of Section 141 of the NI Act is sufficient to prosecute non-signatory directors.

2. Whether the Magistrate failed to apply judicial mind during the mandatory Section 202 Cr.P.C. inquiry by failing to distinguish between corporate and individual culpability.

3. Whether a Director who is neither the Managing Director nor a signatory can be held vicariously liable without specific pleadings regarding day-to-day management.

Section 141 of the NI Act, which creates a "legal fiction" of vicarious liability for persons "in charge of and responsible to" the company.

S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005), establishing that specific averments are required to bridge the gap between corporate status and criminal liability.

Section 202 of the Cr.P.C. (now Section 225 BNSS), which mandates an inquiry for outstation accused to prevent "weaponization" of process.

Ashok Shewakramani v. State of Andhra Pradesh (2023), requiring "in charge of" and "responsible to" to be read conjunctively.

State of Haryana v. Bhajan Lal (1992) regarding the inherent power to quash facially deficient complaints to protect Article 21 rights.

The Court observed that Paragraph 3 of the complaint merely "parroted" the statutory vocabulary of Section 141 without disclosing any "transactional nexus" or specific overt acts attributed to the petitioners.

The Court reasoned that while a Managing Director or signatory is held liable by virtue of office/act, other directors (Tier III) require specific factual anchoring in the complaint, which was "conspicuously silent" here.

Regarding procedure, the Court found the Magistrate’s Section 202 inquiry was a "perfunctory ritual" and a "hollow paper compliance" as it failed to distinguish between the liability of the company, the signatory, and the non-signatory directors resident outside the jurisdiction.

The Court further noted that the instruments appeared to be "blank security cheques" and that converting them into demand instruments for prosecution required specific authorization pleadings which were absent.

The Court allowed the revision, quashing the proceedings in Case No. CS-26711 of 2024 strictly against Accused Nos. 2, 4, and 5, while ordering the trial to proceed against the Company and the Signatory.