WHATSAPP 91-8075113965 (advocate) 20 July 2014

Company directors as accused in 138 case ... how far liable

i am appearing for directors of a company , as a counsel for the accused , in a 138 NI Act case .

how far the director of the company will be VICARIOUSLY held liable , when the company cheque bounces, just because the fact that said cheque bears a director's signature ?

i have heard about some citations . please discus these citations .

1. N.K. Wahi Vs. Shekhar Singh, AIR 2007 SC 1454

2. National Small Industries Corp. Ltd. Vs. Harmeet Singh Paintal

3.A.K. Singhania Vs. Gujarat State Fertilizer Co. Ltd. & Anr.

4.S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89,

5. National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330

6.Harshendra Kumar D. v. Rebatilata Koley, (2011) 3 SCC 351

7. Mrs. Anita Malhotra Vs. Apparel Export Promotion Council & ANR. (Supreme Court)

8.Harshendra Kumar D. vs. Rebatilata Koley and Others, (2011) 3 SCC 351

9.Sabitha Ramamurthy and Another Vs. R B S Channabasavaradhya (2006) 10 SCC 581).

10.Makshud Saiyeed Vs State ofGujarat and others 2007 (11) SCALE 318

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4 Replies

Sunil S Nair (lawyer) 21 July 2014

When summons is issued and date is given for hearing the court may give either next date or on that instance if your directors are really liable can pay the required sum and close the case with no interest but if your clients want to go futher then why the check was bounced weather for in-sufficent fund in bank then they are liable or payed the sum by different means as the check was given for security purpose only and stop payment instruction was given by your client for the same all have to looked in.

Who signed the check, any of the directors or an employee on their behalf is authorised to do so if so pass a resolution in the said company and put the name of such employee who signed the said cheque and let him appear on given dates on behalf of Directors

I have stated in short there are more perspective to go through.

Nadeem Qureshi (Advocate/ nadeemqureshi1@gmail.com) 21 July 2014

Dear Salil

you should discussed personally, it will be better......

R Trivedi (advocate.dma@gmail.com) 23 July 2014

What do you want top discuss ?? For signatory Director there is not much to discuss on Vicarious aspect, similarly for Managing director also there is not much to discuss, for other directors like Honorary directors, new directors, resigned directors, non executive directors..... this defense is valid and they must rush to HC under S.482. Even otherwise the complainant must mention how the non signatory directors are responsible for offense.