Dishonor of Cheque- Independent Directors Responsible for day-to-day Affairs of Company can be Summoned as Accused

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January 28, 2019

Case name: Sh Somendra Khosla N Srinivasa Rao V. State & Anr.

In the case, criminal complaint for dishonor of cheque under Section 138 of Negotiable Instrument Act, 1881 and the petitioners herein were summoned as accused in the case in the capacity of Directors of the accused company. The Petitioners sought quashing of the complaint on the ground that petitioners are independent directors and are not incharge of day-to-day business of the accused company.

The High Court of Delhi however noting the facts and circumstances of the dismissed the petition to quash the complaint and observed that since there are allegations against petitioners of being responsible for day to day functioning of business of accused company, therefore, in the considered opinion of this Court, no case for quashing complaint and summoning order is made out.

Reference can also be made to Supreme Court’s judgment in the case of Standard Chartered Bank vs. State of Maharashtra & Ors.[1], wherein it was held by the Apex Court permitted summoning of the directors of accused-company, who were incharge of day to day business of the accused-company.

The entire case can be accessed here.

 

[1] (2016) 6 SCC 62