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IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA
Amarjit Singh Dulat, S/o Lt. Sh. Shamsher Singh Dulat – Appellant
Versus
Kotak Mahindra Bank Ltd., Through it’s Authorized Representative – Respondent
| Table of Content |
|---|
| 1. quashing of summons applications (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. dishonour of cheques under ni act (Para 9 , 10 , 11 , 12 , 13) |
| 3. directors' duties and liabilities (Para 14 , 15 , 16 , 17) |
| 4. involvement of directors in company management (Para 18 , 19 , 20 , 21 , 22) |
| 5. responsibility for company debts (Para 24 , 25 , 26 , 27) |
| 6. liability of independent directors (Para 31 , 32 , 37 , 39 , 46) |
| 7. classification of directors and their roles (Para 41 , 42 , 44 , 49 , 50 , 52) |
| 8. liability based on specific averments in complaints (Para 60 , 62 , 68) |
| 9. impact of insolvency on liability (Para 70 , 71 , 72) |
| 10. conclusion on petitions and summons (Para 75 , 77 , 78 , 79) |
JUDGMENT :
NEENA BANSAL KRISHNA, J.
1. The aforesaid two Petitions under Section 482 of Code of Criminal Procedure, 1973 have been filed seeking quashing of CC No. 11997/2017 and the Summoning Order dated 09.08.2017, for the Offence under Section 138 read with 141 Negotiable Instruments Act (NI Act).
2. Briefly stated, the Complainant/Kotak Mahindra Bank Ltd. has its registered office at BKC, Bandra, Mumbai. Mr. Pranav Kumar, has been authorized, vide letter dated 24.08.2016, by the Board of Directors o
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)
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....
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.
Non-Executive Directors cannot be held liable under Section 141 of the Negotiable Instruments Act without specific averments demonstrating their involvement in the company's day-to-day affairs.
(1) Dishonour of cheque – Impleadment of all Directors of Accused Company on the basis of a statement that they are in charge of and responsible for conduct of business of company, without anything m....
Liability under Section 141 of NI Act depends on the role in the conduct of the company's affairs, not just the designation, and the burden of proof lies on the accused to establish lack of knowledge....
Non-executive directors cannot be held vicariously liable under Section 141 of the NI Act without specific allegations of their involvement in the company's financial affairs.
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