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IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA
Kusum Garg, W/o Sh. Surender Kumar Garg – Appellant
Versus
Duni Chand Garg, (Since Deceased) Through L.R. Shri Naresh Garg – Respondent
| Table of Content |
|---|
| 1. filing petition for quashing of a summoning order. (Para 1) |
| 2. background on the cheque dishonour case and outstanding payments. (Para 2) |
JUDGMENT :
NEENA BANSAL KRISHNA, J.
1. Petition under Section 482 of Criminal Procedure Code, 1973 (Cr.P.C) has been filed for quashing of the Summoning Order dated 09.07.2015 and proceedings emanating from CC No. 212/01/2015 for Offences under Section 138 /141 of Negotiable Instruments Act , 1881 (N.I. Act).
2. Briefly stated, Complainant/Respondent No. 1/Shri Duni Chand Garg, proprietor of M/s Sarthak India was engaged in the business of trading Plastic Danna and plastic granules. Office bearers of Respondent No. 2/ M/s Lumax Automotive Systems Pvt. Ltd. placed 3 Purchase Orders No. P02 AO No.-0018 dated 16.07.2014, PO-0196 dated 19.09.2014 and P0196 AO No- AO-0048 dated 02.01.2015 to the Respondent No. l/Shri Duni Chand Garg.
3. The Complainant supplied material to the accused persons through various Bills issued between 12.09.2014 – 03.04.2015, and the Respondent No. 2 / M/s Lumax which owed Rs.2,01,16,368/- to the Complainant as on 07.04.2015, issued three Cheques bearing No. 379121, dated 30.01.2015 for Rs.25,00,000/-, No. 5332
Independent Directors are liable under the N.I. Act only if proven to be in charge of a company's affairs at the offense time.
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....
Independent and non-executive directors cannot be held liable under NI Act unless directly involved in the company's day-to-day operations. (Sections 138, 141)
Non-executive directors cannot be held liable under the Negotiable Instruments Act without specific allegations of their involvement; general averments are insufficient to summon them for proceeding.
Dishonour of cheque – A person cannot be made vicariously liable under provisions of Section 141 of NI Act, merely by stating that he was in-charge and responsible for day-to-day-conduct of accused c....
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.
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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