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HC stops trial against petitioners in cheque dishonouring case as they were not directors at time of issue of cheque

September 14, 2020[2020] 119 131 (Gauhati)

FEMA, BANKING & INSURANCE : Where on date offence under section 138 was deemed to have been committed due to dishonour of cheque dated 22-10-2018, petitioners were not Directors in accused no. 1 company and they could not be held responsible for conduct of its affairs and for that matter, for issuance and dishonour of cheques under reference Hence, if criminal proceeding was allowed to proceed against petitioners, it would amount to abuse of process of Court resulting in prejudice to petitioners Thus, inherent powers of High Court under section 482 Cr.P.C. were to be invoked to stop trial against petitioners

• Section 141 of Negotiable Instrument Act has envisaged vicarious liability on part of Directors or other persons, mentioned therein, of company who were in charge of and responsible for conduct of affairs of company at time of commission of offence. A person would be vicariously liable for commission of offence under section 138 by company only in event, conditions laid down in section 141 are satisfied.

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