In Brief
HDFC Bank Limited prosecuted R Square Shri Sai Baba Abhikaran Pvt. Ltd and its three directors for issuing a dishonored cheque. The Bombay High Court quashed proceedings against one director, Mrs. Ranjana Sharma, finding insufficient averments under Section 141 NI Act (vicarious liability of company officers). The Supreme Court reversed this, holding that the complaint adequately alleged she was responsible for the company's day-to-day affairs, management and working—sufficient to invoke Section 141. The Court clarified that the exact statutory language need not be mechanically reproduced; substance matters. There is no universal rule that all directors are in charge of everyday affairs—it depends on facts, including board resolutions. The burden then shifts to the accused to prove she was not in charge.
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