{"id":182884,"date":"2018-01-20T15:00:23","date_gmt":"2018-01-20T09:30:23","guid":{"rendered":"http:\/\/www.scconline.com\/blog\/?p=182884"},"modified":"2018-02-02T14:33:45","modified_gmt":"2018-02-02T09:03:45","slug":"liability-s-141-negotiable-instruments-act-cannot-fastened-person-ground-director-defaulting-company","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2018\/01\/20\/liability-s-141-negotiable-instruments-act-cannot-fastened-person-ground-director-defaulting-company\/","title":{"rendered":"Liability under S. 141, Negotiable Instruments Act cannot be fastened to a person only on the ground that he was a director in defaulting company"},"content":{"rendered":"

Delhi High Court:<\/strong> A Single Judge Bench comprising of Sanjeev Sachdeva, J, allowed a petition wherein the petitioner had challenged the order whereby he was summoned in a complaint filed under Section 138 of the NI Act.<\/p>\n

The petitioner had been a director of the accused company. The cheque in question was in the furtherance of the accused company\u2019s business. The petition argued that he had already tendered his resignation months before the issuance of the cheque and had stopped participating in board meetings and decision making. The issue before the Court was whether the complainant had made out a case for proceeding under Section 141 against the petitioner, who has been named a director. The Court noted that liability under Section 141 is vicariously fastened on a person who is in-charge and responsible to the company for the conduct of business of the company. The Court noted that though the petitioner was a director by virtue of his resignation being accepted on a date later than the issuance of the cheque, he could not be said to be responsible for the conduct of the accused company\u2019s business. The Supreme Court in SMS Pharmaceuticals<\/em> v. Neeta Bhalla<\/em>, (2005) 8 SCC 89<\/a> held that the complaint must disclose necessary facts which make a person liable. The complainant had not fulfilled this mandate and had merely fastened liability on the petitioner by virtue of him being a director. Petition allowed. [Manoj Kumar Gupta v. Barclays Bank,\u00a0 2018 SCC OnLine Del 6587<\/a>, decided on 16.01.2018]<\/p>\n","protected":false},"excerpt":{"rendered":"

Delhi High Court: A Single Judge Bench comprising of Sanjeev Sachdeva, J, allowed a petition wherein the petitioner had challenged the order <\/p>\n","protected":false},"author":91,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[],"class_list":["post-182884","post","type-post","status-publish","format-standard","hentry","category-casebriefs","category-highcourts"],"yoast_head":"\nLiability under S. 141, Negotiable Instruments Act cannot be fastened to a person only on the ground that he was a director in defaulting company | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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no offence is attributable to Company, it is not possible to attach liability on Managing Director by deeming provisions of S. 141 of the NI Act: Del HC","author":"Bhumika Indulia","date":"May 10, 2022","format":false,"excerpt":"Delhi High Court: Asha Menon, J., held that if no offence is attributed to the company, its Directors and other persons responsible for the conduct of its business cannot be saddled with any liability. The petitioner had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Delhi_New-logo.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Delhi_New-logo.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Delhi_New-logo.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Delhi_New-logo.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/01\/Delhi_New-logo.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":231311,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/06\/24\/dishonour-of-cheque-mp-hc-director-managing-director-joint-director-other-officers-and-employees-of-a-company-can-not-be-prosecuted-under-s-138-of-ni-act-unless-the-company-is-impleaded-as-an-acc\/","url_meta":{"origin":182884,"position":1},"title":"[Dishonour of Cheque] MP HC | Director\/MD\/JD\/other officers and employees of a company can not be prosecuted under S. 138 of NI Act unless the company is impleaded as an accused","author":"Bhumika Indulia","date":"June 24, 2020","format":false,"excerpt":"Madhya Pradesh High Court:\u00a0Rajendra Kumar Srivastava, J., while addressing a matter with regard to dishonour of cheque held that, Director\/Managing Director\/Joint Director\/other officers and employees of company can not be prosecuted under Section 138 of NI Act unless the company is impleaded as an accused Petitioner is aggrieved with the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":239115,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/11\/12\/madras-hc-can-a-non-executive-director-who-is-not-responsible-for-day-to-day-affairs-of-company-be-made-vicariously-liable-for-offence-committed-by-company-courts-interpretation-in-light-of-s\/","url_meta":{"origin":182884,"position":2},"title":"Madras HC | Can a ‘Non-Executive Director’ who is not responsible for day-to-day affairs of company be made vicariously liable for offence committed by company? Court’s interpretation in light of S. 141 NI Act","author":"Bhumika Indulia","date":"November 12, 2020","format":false,"excerpt":"Madras High Court:\u00a0G.K. Ilathiraiyan, J., while addressing the instant matter, observed that, a person who is inducted as the Non-Executive Director of an accused company and not responsible for the day-to-day affairs of the company, he\/she cannot be vicariously liable for the offence committed by the company. Petitioners Counsel submitted\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":236389,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/09\/28\/del-hc-can-a-director-who-has-resigned-from-company-be-held-liable-for-cheques-subsequently-issued-and-dishonoured-hc-explains-in-light-of-s-141-ni-act\/","url_meta":{"origin":182884,"position":3},"title":"Del HC | Can a director who has resigned from company be held liable for cheques subsequently issued and dishonoured? HC explains in light of S. 141 NI Act","author":"Bhumika Indulia","date":"September 28, 2020","format":false,"excerpt":"Delhi High Court: V. Kameswar Rao, J., while addressing the present matter observed that a retired director of the company cannot be held liable for the day to day acts of company and cheques issued and dishonoured post his retirement. Petitioner's Counsel V.M. Kannan contended that the proceedings by respondent\u2026","rel":"","context":"In "Banking and Negotiable Instruments"","block_context":{"text":"Banking and Negotiable Instruments","link":"https:\/\/www.scconline.com\/blog\/post\/category\/banking-and-negotiable-instruments\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":274559,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/09\/27\/supreme-court-calcutta-high-court-section-141negotiable-instruments-act-1881-dishonour-of-cheque-interest-of-justice-managing-director-criminal-liability-vicarious-liability-independent-non-executive\/","url_meta":{"origin":182884,"position":4},"title":"Explained| Dishonour of Cheques: Can non-executive Directors of the accused company be held vicariously liable under Section 141 NI Act?","author":"Editor","date":"September 27, 2022","format":false,"excerpt":"\u00a0 \u00a0 Supreme Court: In an appeal against a judgment passed by the Calcutta High Court dismissing the Criminal Revision Application filed by the appellants for quashing the proceedings under Sections 138 and 141 of the Negotiable Instruments (NI) Act,1881, the division bench of Indira Banerjee* and J.K. 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