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Section 141 of the Negotiable Instruments Act extends liability...
Vicarious liability for dishonoured company cheques may extend to non-signatory directors where complaints contain foundational responsibility averments.
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Section 141 of the Negotiable Instruments Act extends liability for dishonoured company cheques beyond the signatory to directors who were in charge of and responsible for the company's business when the offence occurred. At the summoning stage, a Magistrate need only determine whether the complaint and supporting material disclose a prima facie case, not whether conviction is supported. Allegations that directors controlled company affairs, together with the petitioner's directorship during relevant transactions, were treated as sufficient foundational averments for trial. Questions concerning actual managerial involvement and non-participation require evidence before the Trial Court. The challenge to the summoning orders and cheque-dishonour proceedings was rejected.
Section 141 of the Negotiable Instruments Act extends liability for dishonoured company cheques beyond the signatory to directors who were in charge of and responsible for the company's business when the offence occurred. At the summoning stage, a Magistrate need only determine whether the complaint and supporting material disclose a prima facie case, not whether conviction is supported. Allegations that directors controlled company affairs, together with the petitioner's directorship during relevant transactions, were treated as sufficient foundational averments for trial. Questions concerning actual managerial involvement and non-participation require evidence before the Trial Court. The challenge to the summoning orders and cheque-dishonour proceedings was rejected.
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