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IN THE HIGH COURT OF DELHI AT NEW DELHI
ADARSH SARAN & ANR – Appellant
Versus
CENTRAL BANK OF INDIA & ORS – Respondent
| Table of Content |
|---|
| 1. quashing of the summoning order (Para 1 , 2 , 3 , 4 , 5) |
| 2. arguments against petitioners' involvement (Para 6 , 7 , 8 , 9) |
| 3. arguments regarding lack of specific roles (Para 10 , 11 , 12 , 13) |
| 4. complainant's stance on petitioners' responsibility (Para 14 , 15) |
| 5. pre-trial jurisdiction of the court under ni act (Para 16 , 17 , 18) |
| 6. specific roles necessary for liability under ni act (Para 19 , 20 , 21 , 22) |
| 7. criteria for being in charge under ni act (Para 23 , 24 , 25 , 26) |
| 8. analysis of petitioners' evidence and roles (Para 27 , 28 , 29) |
| 9. assessment of non-executive roles (Para 30 , 31 , 32) |
| 10. lack of necessary averments in complaint (Para 33) |
| 11. conclusion to quash petitions (Para 34 , 35 , 36) |
JUDGMENT :
AMIT MAHAJAN, J.
1. The present petitions are filed seeking quashing of summoning order dated 24.03.2018 (hereafter ‘impugned order’) passed by the learned Metropolitan Magistrate (‘MM’), Patiala House Courts, New Delhi in complaint case bearing CC No. 36097/2016.
2. The subject complaint was filed by the respondent in CRL.M.C. 2520/2020 (hereafter ‘complainant’) under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’) against the accused company -
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....
(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....
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.
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....
The main legal point established in the judgment is the requirement for specific averments and unimpeachable evidence to establish vicarious liability of directors in cases of cheque bounce under Sec....
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 Section 141 of the NI Act requires proof that a director was in charge of the company at the time the offence was committed, mere prior association is insufficient.
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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