Legal Reference Library

The Supreme Court of India has held in a recent judgment Mainuddin Abdul Sattar Shaikh vs. Vijay D Salvi (Criminal Appeal No. 1472 of 2009), that the accused in a proceeding under Section 138 of the Negotiable Instruments Act can be made liable there under even if the Company had not been named in the notice or the complaint, as on facts it held that there was no necessity for the complainant to prove that the said accused was in charge of the affairs of the company, by virtue of the position he held. The Court drew and applied the analogy from the proposition of law laid down in P.J. Agro Tech Limited and Ors.  Vs. Water Base Limited [(2010) 12 SCC 146] that ‘where the cheque is drawn by the employee of the appellant company on his personal account, even if it be for discharging dues of the appellant-company and its Directors, the appellant-company and its Directors cannot be made liable under Section 138’ The aforesaid ruling of the Apex Court came in the following fact situation...

Arising out of SLP (Crl.) No. 6134-6135 of 2005] WITH CRIMINAL APPEAL NO. 951 OF 2006 [Arising out of SLP (Crl.) No. 6252 of 2005] S.B. SINHA, J : Sabitha Ramamurthy & Anr vs R.B.S. Channabasavaradhya on 13 September, 2006 Section 138 of the Negotiable Instruments Act provides that where a cheque drawn by a person is returned by the bank unpaid on the grounds specified therein, the person who had drawn the said cheque shall be deemed to have committed an offence thereunder. Section 139 provides for a presumption in favour of a holder of a negotiable instrument. Section 141 of the Act provides for offences by a company. Sub-section (1) of Section 141 reads as under: "141. Offences by companies.(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be...