In Brief
A company issued a dishonoured cheque leading to criminal proceedings under the Negotiable Instruments Act against the company, its Managing Director, and three independent non-executive directors. The trial court rejected the directors' application to be exempted from personal attendance, and the High Court upheld this rejection. The Supreme Court allowed the appeal and quashed the proceedings against the three non-executive directors. The Court held that liability under Section 141 of the NI Act depends on one's actual role in the company's business, not merely holding the title of director. Non-executive independent directors, not involved in day-to-day affairs and not signatories to the cheque, cannot be prosecuted without specific pleadings detailing their responsibility for the company's business."
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