HC ruled in favor of company directors, quashing criminal ...

Directors Not Liable Under Section 141 NI Act For Dishonored Cheques Due To Lack Of Direct Business Involvement

February 27, 2025

Case Laws Indian Laws HC

HC ruled in favor of company directors, quashing criminal proceedings under NI Act for dishonored cheques. Court determined petitioners successfully demonstrated they were not responsible for company's business conduct when offense occurred. Following precedent from Rathish Babu Unnikrishnan case, HC found unimpeachable evidence at pre-trial stage showing directors lacked involvement in cheque transactions. Complaint failed to establish specific roles of directors or their control over business operations. Mere directorship was insufficient to trigger vicarious liability under Section 141 NI Act. Court emphasized requirement for clear evidence of direct responsibility in company management for criminal liability to attach. Petition allowed, proceedings against directors terminated.

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HC ruled in favor of company directors, quashing criminal ...

Directors Not Liable Under Section 141 NI Act For Dishonored Cheques Due To Lack Of Direct Business Involvement

February 27, 2025

Case Laws Indian Laws HC

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