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Negotiable Instruments Act, Section 138, Section 141, Vicarious Liability, Dishonour of Cheque, One Person Company, Summoning Order, Quashing of Complaint, High Court of Delhi, Ram Kumar Pathak.
27 Feb, 2026
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As per case facts, the complainant invested money through a company and its director, with the petitioner allegedly involved in day-to-day business under the director's instructions. A cheque issued by
...the company and signed by the director was dishonoured. The Magistrate summoned the petitioner along with others, and the Sessions Court upheld this. The petitioner then appealed to the High Court, arguing that he was not the drawer, signatory, or a formal office bearer of the company, and lacked specific averments of responsibility for the company's business affairs needed for vicarious liability under Section 141 of the NI Act. The question arose whether the complaint contained sufficient specific averments to hold the petitioner vicariously liable under Section 141 of the NI Act, considering his lack of formal designation and the nature of the allegations. Finally, the High Court, citing Supreme Court precedents, ruled that mere involvement or acting under instructions, without specific averments demonstrating that the person was *in charge of and responsible for the conduct of the business* of the company, is insufficient to attract vicarious liability. Since the complaint lacked such specific assertions regarding the petitioner's control and responsibility, the summoning order and complaint against the petitioner were quashed.
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