Just a moment...
Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
Press 'Enter' after typing page number.
Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
Press 'Enter' after typing page number.
Press 'Enter' after typing page number.
Don't have an account? Register Here
Press 'Enter' after typing page number.
Issues: Whether the summoning order in a complaint under the Negotiable Instruments Act, 1881 deserved to be quashed on the grounds that the petitioner had resigned as a director before the cheque date, that the complaint lacked necessary averments to attract vicarious liability, and that no prima facie case was made out against him.
Analysis: The complaint and the summoning order recorded that the petitioner was the signatory of the dishonoured cheque and had earlier executed the transaction documents on behalf of the company. In the case of a director who signs the cheque on behalf of the company, specific averments that he was in charge of and responsible for the conduct of business are not indispensable, and liability under Section 141 of the Negotiable Instruments Act, 1881 may arise from the role of the signatory itself. The material also showed that the petitioner's plea of resignation did not displace the complaint's assertions that he remained connected with the transaction and had continued to assist the company even after stepping down. The Court treated the objections regarding resignation, absence of averments, and service of notice as matters not sufficient to invalidate the summoning order at the threshold.
Conclusion: The challenge to the summoning order was rejected and the petition was dismissed.
Ratio Decidendi: A director who signs a cheque on behalf of a company can be proceeded against under Section 141 of the Negotiable Instruments Act, 1881 without a separate specific averment that he was in charge of and responsible for the company's business, and a plea of prior resignation will not by itself defeat summoning where the complaint discloses his active role in the transaction.