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AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 could be sustained against a director/chairman when the cheque was issued on behalf of a company but the company was not arraigned as an accused and the statutory notice was served only on the individual.
Analysis: Section 141 of the Negotiable Instruments Act, 1881 fastens liability on persons in charge of and responsible to the company only where the company itself is prosecuted for the offence under Section 138. The complaint here proceeded against the petitioner alone, despite the cheque being issued on behalf of the company. In the absence of the company as an accused, and in the absence of the necessary foundation for vicarious liability, the prosecution was held to be legally unsustainable.
Conclusion: The complaint and the order framing charge could not be sustained against the petitioner alone.
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