Dragging company directors into action when check bounces is a mockery of the judicial process

Supreme Court: The Supreme Court on Monday said that dragging the directors of a company into criminal proceedings under the Negotiable Instruments (NI) Act in respect of issuance or bounce of a check merely because of their designation would amount to a mockery of the judicial system.

The apex court said this while quashing the criminal proceedings in the alleged check bounce case against three persons who were independent, non-executive directors of the accused company. The apex court, while allowing all the three appeals, said that the September 2019 order of the Calcutta High Court has been set aside. which rejected his application for quashing of the proceedings pending before a court in Birbhum in respect of the complaint under the provisions of the NI Act.

Every person associated with the company does not come under the purview of judicial provisions
A bench of Justices Indira Banerjee and JK Maheshwari held that every person connected with the company does not come within the purview of section 141 of the NI Act and the directors of the firm, who were not in charge of it or responsible for its business at the relevant time, were shall not be liable under those provisions.

Referring to the earlier judgment of the apex court, the bench said that it was held that the liability under section 138/141 of the NI Act arises on account of being responsible for the conduct of the business of the company at the relevant time, when the offense and not merely by virtue of holding office or position in any company. Section 138 of NI Act deals with check bounce.

What did the bench say in its decision?
The bench, in its 24-page judgment, said that in criminal proceedings under the NI Act in respect of issuance or bounce of checks, directors such as Director (Personnel), Director (HRD) can be dragged into action only because of their designation, justice and its It would be like making fun of the process.

Ram Gopal Yadav Meets CM Yogi Adityanath: SP leader Ram Gopal Yadav meets CM Yogi, know the reason?

Sunita Ahuja had turned down the offer to do a film with Govinda, knowing the reason will make you laugh!