SC held that a non-executive director cannot be held vicariously ...

Non-Executive Director Not Liable Under Section 141 NI Act for Cheques Dishonored After Resignation Without Active Involvement

February 19, 2025

Case Laws Indian Laws SC

SC held that a non-executive director cannot be held vicariously liable under Section 141 of NI Act for dishonored cheques where he had resigned prior to the offense and was not actively involved in company operations. Court emphasized that mere directorship designation is insufficient to establish liability - specific allegations of active involvement in company affairs are required. Evidence showed appellant was neither a cheque signatory nor involved in financial decisions, having resigned as independent non-executive director with proper ROC notifications. Given his limited role without financial or operational responsibilities, the complaints failed to meet legal requirements for vicarious liability. Appeal allowed, setting aside HC's judgment.

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SC held that a non-executive director cannot be held vicariously ...

Non-Executive Director Not Liable Under Section 141 NI Act for Cheques Dishonored After Resignation Without Active Involvement

February 19, 2025

Case Laws Indian Laws SC

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