DISHONOUR OF CHEQUES-ICSI

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From: Ramachandran Mahadevan ramachandran.mahadevan@gmail.com

It is a settled law that not all the directors of a company are
liable in case of dishonour of cheques. The onus is on the
complainant to prove that a director is responsible for the conduct
of the affairs of the company in order to hold him liable and in
the absence of a specific averment in the complaint no director
is liable under section 138 of the Negotiable Instruments Act,
1881 unless he is a MD or JMD or WTD or he is a signatory to
the Cheque. The directors can establish the fact that they are
not guilty either by undergoing the trial before the Magistrate
Court in which the complaint is filed or by approaching the
High Court under section 482 at the earliest before the
commencement of the trial inorder to quash the proceedings
against him as he is no way connected to the proceedings initiated
before the Magistrate Court under section 138 read with Section
141 of the Negotiable Instruments Act, 1881.

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