TaxTMI 
TaxTMI 
Cheque Dishonour and Corporate Responsibility: Analyzing the Supreme Court's Latest Judgment
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....n 141 of the Negotiable Instruments Act, 1881 (the NI Act), offers a significant exposition on the contours of directorial responsibility in cases of cheque dishonour. This article provides a comprehensive analysis of the judgment, focusing on the legal principles involved, the Court's interpretation, and its implications for corporate governance and directorial liability. Background The cas....
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....nts: The Court examined whether the necessary averments, as prescribed by law, were present in the complaint to rope in the directors. * Service of Statutory Notice: The role of statutory notice under Section 138 and its impact on the initiation of proceedings was another critical aspect. Court's Analysis and Decision * Interpretation of Section 141(1): The Court held that for a direc....
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....d for strict compliance with statutory requirements. * Quashing of Proceedings: Consequently, the Court quashed the proceedings against the directors, citing non-compliance with the essential prerequisites of Section 141(1). Legal Implications and Conclusion The Supreme Court's judgment underscores the necessity for precise legal drafting in complaints under the NI Act, particularly when....