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Directors Cannot Be Prosecuted In A Cheque Dishonour Case If The Company Is Not Arrayed As Accused: Kerala HC
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The High Court of Kerala has repeated that when a cheque issued by a company is discredited, it is not possible to prosecute the director of a said company under Section 138 of the Negotiable Instruments Act
If the Company was not named in the trial. Judge A. Badharudeen, based on the law established by the Apex Court, observed that proceedings against a company's directors solely because the director signed a cheque would be void if the company was not subject to an appeal accused as a defendant in the case. In the present case, the check was, of course, issued on behalf of a company and the company was not prosecuted. Therefore, considering the above legal situation, the whole proceedings are changed and therefore the sentencing at the same time is likely to be annulled. A petition for reconsideration is filed against conviction for refusing to honour a cheque of Rs 5,26,500 issued under the signatures of the petitioners to be considered as a supervisor. their director, in the name of Deltron Kuri Pvt. The main legal issue before the Court is whether a prosecution under section 42 of the NI Act is brought against the directors of a company without naming the company as a respondent. The attorney representing the petitioners, Attorney Noble Mathew, relied on the Apex Court decision in Himanshu v. B. Shivamurthy, argues that in the absence of charges by the company, a claim against the administrator is unacceptable simply because the Company's administrator has signed the check and on behalf of the Company.
The Apex Court further ruled that criminal conduct by the company was a clear precondition for the liability of the Directors. So the deciding ratio, certainly, is that, in a prosecution alleging a punishable offence under Section 138 of the N. I Act, where a check is issued by a corporation, a prosecution may stand without naming the company as a defendant. Without a doubt, his or her administrators could qualify as co-defendants, who sign the check, according to the Court. Emphasizing the fact that in this case the check was issued in the name and on behalf of a company and that the company was not prosecuted as a defendant, the Court held that, Under the law issued by the Supreme Court enforcement, the entire prosecution is flawed and the guilty verdict and conviction may be overturned. Accordingly, the Court made a motion to review and rescind the disgraceful order. Case Title: Kallar Harikumar v. Amritha Enterprises Pvt Ltd.
Tags : #supreme court #kerala high court #Judge A. Badharudeen #negotiable instrumental act #Kallar Harikumar v. Amritha Enterprises Pvt Ltd
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