Sec 141 NI Act: MDs liable for company's conduct, signatories covered. Complaint against directors quashed sans averments u/s 50(1). MD responsible.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The court interpreted Section 141 of the Negotiable Instruments Act, holding that managing directors and joint managing directors are responsible for the company's conduct by virtue of their position. Signatories of dishonored checks are also covered u/s 141(2). In the absence of averments u/s 50(1) of the 1984 Act in the complaint, the trial court could not take cognizance against the directors. However, the managing director would be responsible for the company's business. The complaint was quashed against the directors but allowed against the managing director and the company. The Supreme Court's order was modified accordingly.....