NO PROSECUTION OF DIRECTORS FOR BOUNCED CHEQUE
The Supreme Court has ruled that directors of a company cannot be prosecuted in cheque bounce
cases unless it is proved that the person was directly responsible or was "in charge" of the firm's operation at the time of issuing the cheque. "Every person connected with the company shall not
fall within the ambit of the provision. Only those persons who were in-charge of and responsible for
the conduct of the business of the company at the time of commission of an offence will be liable for
criminal action. "It follows from the fact that if a director of a company who was not in-charge of and
was not responsible for the conduct of the business of the company at the relevant time will not be liable for a criminal offence under the provisions," a bench of Justices P Sathasivam and HL Dattu said.
cases unless it is proved that the person was directly responsible or was "in charge" of the firm's operation at the time of issuing the cheque. "Every person connected with the company shall not
fall within the ambit of the provision. Only those persons who were in-charge of and responsible for
the conduct of the business of the company at the time of commission of an offence will be liable for
criminal action. "It follows from the fact that if a director of a company who was not in-charge of and
was not responsible for the conduct of the business of the company at the relevant time will not be liable for a criminal offence under the provisions," a bench of Justices P Sathasivam and HL Dattu said.
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