Cheque Dishonor Case: Court Rules Insufficient Grounds for Directors' Vicarious Liability, Dismisses Prosecution.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Dishonour of Cheque - vicarious liability of directors - After considering the submissions of both parties, the court found that the impugned orders suffered from non-application of mind and lacked sufficient averments to justify the prosecution of the petitioners. It emphasized that liability under Section 141 is not based solely on designation but on the actual role played in the company's affairs. As the complaints failed to provide specific allegations against the petitioners regarding their involvement or negligence, the court held that prosecuting them would amount to an abuse of process.....