In Brief
The appellant, a businessman, issued a criminal complaint under the Negotiable Instruments Act against the director of a company for a dishonoured cheque totalling Rs. 10 lakhs. The High Court quashed the proceedings, finding that the company itself was not named as an accused and the complaint lacked specific averments that the director was in charge of and responsible for the company's business. The Supreme Court upheld the High Court's decision, holding that: (1) the company must be arraigned as an accused for prosecution under Section 141 of the Act; and (2) merely being a director is insufficient—the complaint must contain explicit factual averments showing the director was responsible for the company's business conduct at the time of the offence. Without such averments and proper impleadment, the complaint is bad in law.
The lawyer headnote and full judgment text are available to registered users.