2026 Supreme(Cal) 72

IN THE HIGH COURT AT CALCUTTA 
UDAY KUMAR, J. 
Pravin Kumar Agarwal & Ors. – Petitioner
Versus 
Ddev Plastiks Industries Limited – Respondent 
CRR 2301 of 2024 
Decided On : 08-05-2026 

Vicarious liability for non-signatory directors under penal provisions governing corporate cheque dishonour requires specific pleading of the director's active involvement in the management related to the transaction. 'Template pleadings' lacking factual nexus fail to establish a prima facie case and do not justify invoking criminal process.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 141 - Code of Criminal Procedure, 1973 - Section 202 - Criminal law - Quashing of proceedings - Vicarious liability - Dishonour of cheque - Directors who are not signatories or managing directors cannot be held vicariously liable under the deeming fiction of Section 141 solely by virtue of their office - Complaint must provide specific factual averments describing the role and responsibility of the accused in the day-to-day management of the business at the material time - Mere replication of statutory language in a complaint, referred to as 'template pleading,' is insufficient to sustain a prosecution - Jurisdictional requirement for a mandatory inquiry under Section 202 Cr.P.C. for outstation accused is not a perfunctory ritual but a substantive safeguard intended to determine if there are sufficient grounds for proceeding - Failure to distinguish between corporate liability and individual culpability of non-signatory directors constitutes a violation of the procedural due process and an abuse of the process of law. (Paras 6, 7, 21-24, 25-28, 33-36, 54)

(B) Fundamental Rights - Article 21 of the Constitution of India - Right to personal liberty - Criminal proceedings initiated on the basis of a facially deficient complaint and conducted without proper judicial filtration against non-signatory directors constitute an egregious abuse of the process of law, effectively weaponizing the criminal process for purposes of civil recovery. (Paras 13, 47, 53)

Facts of the case:
The petitioners sought the quashing of a criminal complaint initiated against them arising from the dishonour of cheques issued by a company for the discharge of an alleged outstanding debt. The petitioners, who were directors but neither signatories to the cheques nor managing directors, argued that they were arrayed as accused through 'template pleading' without any specific allegations linking them to the transaction or the day-to-day management of the business. Additionally, the petitioners challenged the summoning order on the grounds that the trial court failed to conduct a mandatory and meaningful inquiry under Section 202 of the Code of Criminal Procedure, despite the petitioners residing outside the court's territorial jurisdiction.

Findings of Court:
The court held that the complaint lacked the necessary specific assertions to bridge the gap between corporate default and individual criminal liability. The court found that the trial court’s inquiry was mechanical and failed to apply its judicial mind to distinguish between the liability of the company, the signatory, and the non-signatory directors, thereby violating the procedural safeguards designed to protect individuals from oppressive litigation.

Issues: (1) Whether bald statutory averments in a complaint are sufficient to sustain vicarious liability against non-signatory directors; (2) Whether the mandatory inquiry under Section 202 Cr.P.C. for outstation accused necessitates a substantive evaluation of individual culpability; (3) Whether the initiation of proceedings on a facially deficient complaint constitutes an abuse of the process of law.

Ratio Decidendi: Vicarious liability under Section 141 requires the disclosure of a 'transactional link' and specific overt acts; status as a director does not create an automatic presumption of guilt. An inquiry under Section 202 Cr.P.C. must be a substantive exercise to verify a prima facie case, not a mere ritualistic compliance. Continuous prosecution on deficient pleadings violates the right to personal liberty and constitutes an abuse of the process of law.

Result: Criminal proceedings and the order of summoning are quashed and set aside in respect of the petitioner-accused; the application is allowed.