Whether a Director who has resigned can be held liable under Section 138/141 of Negotiable Instruments Act, 1881 – Rajesh Viren Shah Vs. Redington (India) Ltd. – Supreme Court

Hon’ble Supreme Court holds that the position of law as to the liability that can be fastened upon a Director for non-realisation of a cheque is no longer res integra. Section 141 of the N.I. Act states that every person who at the time of the offence was responsible for the affairs/conduct of the business of the company, shall be held liable and proceeded against under Section 138 of the N.I. Act, with exception thereto being that such an act, if done without his knowledge or after him having taken all necessary precautions, would not be held liable. However, if it is proved that any act of a company is proved to have been done with the connivance or consent or may be attributable to (i) a director; (ii) a manager; (iii) a secretary; or (iv) any other officer – they shall be deemed to be guilty of that offence and shall be proceeded against accordingly.

Whether a Director who has resigned can be held liable under Section 138/141 of Negotiable Instruments Act, 1881 – Rajesh Viren Shah Vs. Redington (India) Ltd. – Supreme Court Read Post »