As per case facts, Progfin Private Limited extended credit facilities to GBL Chemicals Limited. Cheques issued by the company were dishonored, leading to complaints under Section 138 of the NI ... Act and summoning orders against the company and its directors. The petitioners challenged these orders, arguing that loan proceeds were diverted by a former director (Mr. Ramakant Pilani) through fraud, rendering the cheques invalid due to unauthorized single signature and no legally enforceable debt for the company. They claimed to be victims of fraud. The complainant contended that the debt was valid, internal fraud is an inter-se matter, and the directors were vicariously liable. The question arose whether the summoning orders against the company and its active directors should be quashed at this pre-trial stage, considering the defenses raised and the prior dropping of the signatory director. Finally, the High Court dismissed the petitions, holding that the defenses, including allegations of fraud and invalidity of cheques due to bank mandate violation, are factual issues requiring trial and cannot be adjudicated in a summary quashing proceeding. The court found a prima facie case for vicarious liability against the company and the continuing directors.