In Brief
A former Director of a company cannot be held criminally liable under the Negotiable Instruments Act for cheques dishonoured after his resignation if he neither issued those cheques nor was involved in the company's day-to-day affairs at the time of dishonour. The Supreme Court held that vicarious liability under Section 141 requires specific evidence showing how and in what manner the accused was responsible for the business at the relevant time; being a Director at any point is insufficient. The Court quashed the criminal proceedings, emphasizing that courts must strictly scrutinize complaints and apply settled principles before making someone vicariously liable for corporate offences.
The lawyer headnote and full judgment text are available to registered users.