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TMI BlogSupreme Court Clarifies Vicarious Liability of Directors in Cheque Dishonour CasesX X X X Extracts X X X X X X X X Extracts X X X X ..... arity on the issue of vicarious liability of directors in cases involving dishonour of cheques u/s 138 of the Negotiable Instruments Act, 1881 . The case pertains to a dispute between M/s. Bharti Airtel Limited (the complainant) and M/s. Fibtel Telecom Solutions (India) Private Limited (the accused company), wherein the latter had issued several post-dated cheques to the former, which were subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005 (9) TMI 304 - Supreme Court and another, and Ashoke Mal Bafna Versus M/s Upper India Steel Mfg. Engg. Co. Ltd. - 2017 (3) TMI 907 - Supreme Court , to support her arguments. On the other hand, the complainant argued that the High Court had rightly dismissed the petition for quashing, considering the material on record, and that the grounds raised by the appellant were matters of defense that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the appellant was either the Managing Director or the Joint Managing Director of the company. Analysis and Decision by the Court The Supreme Court, relying on its previous judgments, reiterated the settled legal position that merely reproducing the words of Section 141 of the Negotiable Instruments Act , without a clear statement of facts as to how and in what manner a director was responsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner the director was responsible for the conduct of the company's business. Summary of the Judgment The Supreme Court, in this judgment, has reinforced the principle that for a director to be held vicariously liable u/s 141 of the Negotiable Instruments Act, 1881 , in cases involving dishonour of cheques, there must be specific averments in the complaint regarding the director's role and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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