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DELHI HIGH COURT
SWARANA KANTA SHARMA
Preeti – Appellant
Versus
State – Respondent
| Table of Content |
|---|
| 1. context of the criminal complaint and agreements. (Para 1 , 2 , 3) |
| 2. arguments regarding the petitioner's involvement. (Para 4 , 5 , 6) |
| 3. legal principles governing directors' liability. (Para 8 , 10 , 11 , 12 , 13) |
| 4. need for specific allegations against directors. (Para 20 , 21 , 22) |
| 5. quashing of summoning order against the petitioner. (Para 24 , 25) |
JUDGMENT
Swarana Kanta Sharma, J. By way of the present petition filed under Section 482 of the Criminal Procedure Code, 1973, the petitioner seeks quashing of the summoning order dated 28.11.2018 passed by then Metropolitan Magistrate-04, Patiala House Courts, Delhi and the Criminal Complaint no. 16201/2017 titled as "M/s PEC Ltd. v. M/s KS Oil Ltd. & Ors." and all its consequent proceeding pending in the court of MM-04 (NI Act), or any successor court at Patiala House Courts,New Delhi.
2. Briefly stated, facts of the case, leading to the fling of present petition, are as under:
a. That seven agreements (High Seas Sales contracts) were executed between the complainant and the accused no.1 company i.e., K.S. Oils Ltd. for importing crude oil through complainant company, on the respective dates: (i) Two agreements
Independent directors cannot be held criminally liable under Section 138 of the NI Act without specific allegations demonstrating their responsibility for the company's conduct, as mere designation i....
Merely holding the designation of director does not establish liability under the Negotiable Instruments Act; specific allegations of involvement and responsibility in the company's affairs at the ti....
Specific averments and proof of the accused's role in the conduct of the company's business at the relevant time are necessary to establish vicarious liability under section 141 NIA.
Vicarious liability under the Negotiable Instruments Act requires proof of a director's active involvement and responsibility in the company's operations, not merely their title.
Directors and company secretary can be held liable under Section 138 and 141 of the NI Act if they are responsible for the day-to-day affairs of the company or if their negligence, connivance, or con....
The company must be summoned as an accused in Section 138 N.I. Act cases for proceedings against its Directors to be valid.
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