Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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  • The Supreme Court observed that an averment that a Managing Director or Joint Managing Directors were in charge of and responsible for the conduct of a company's business is not required to charge them under Section 141 of the Negotiable Instruments Act, 1881. 
  • The court reiterated that impleading independent and non-executive directors of a company solely on the basis of a statement that they are in charge of and responsible for the conduct of the company's business does not meet the requirements of Section 141 of the NI Act.
  • The bench of Justices Indira Banerjee and JK Maheshwari observed that specific averments in the pleadings must be made to substantiate the contention that such Director was in charge of and responsible for the conduct of the Company's business or the Company, unless such Director is the designated Managing Director or Joint Managing Director, who would obviously be responsible for the company and/or its business and affairs. 
  • It would be a travesty of justice to drag Directors, who may not even be involved in the issuance or dishonour of a cheque, such as Directors (Personnel), Directors (Human Resources Development), and so on, into criminal proceedings under the NI Act solely because of their designation, the bench added.
  • The court granted an appeal against the Calcutta High Court's decision to dismiss a petition filed under Section 482 CrPC by directors of MBL Infrastructure Limited, a public limited company, who were named as defendants in a cheque bounce case filed by Panchami Stone Quarry. 
  • The accused claimed to be independent non-executive directors of the Company, with no responsibility for  day-to-day operations of the Accused Company. 
  • The court stated that a director of a company who was not in charge or responsible for the conduct of the company's business at the relevant time will not be liable under those provisions.
  • The bench noted that the High Court refused to dismiss the case against the accused despite the fact that it was specifically stated in the petition that all of the accused persons were responsible and liable for the entire business management of the Accused Company. 
  • The court also clarified that the proceedings against the other accused in the criminal case, specifically the Accused Company, its Managing Director/Additional Managing Director, and/or the signatory of the disputed cheque, may continue.
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