Cheque Dishonour under S.138 of Negotiable Instruments Act, 1881 and Necessary Averments in Complaint

Cheque Dishonour under S.138 of Negotiable Instruments Act, 1881 and Necessary Averments in Complaint 

In case of Ram Kumar Pathak v. Shashi Devi [2026] GCtR 195 (Delhi) dealing with S.138 of Negotiable Instruments Act, 1881 the statutory scheme of Sections 138 and 141 of the NI Act, which deal with the offence of dishonour of cheque and vicarious liability in cases where the drawer is a company were explained. It was held that Section 141 of the NI Act envisages vicarious liability and is divided into two distinct parts, i.e. sub-section (1) and sub-section (2), each operating in different factual scenarios. 

In this case, Accused 1 was a Company ; Accused 2 was an individual who was not the Director of the Company.

Applicability of S.141 

While sub-section (1) of S.141 fastens liability on persons who are in charge of and responsible for the conduct of the business of the company, irrespective of their designation, sub-section (2) of S.141 applies where the offence is committed with the consent, connivance or neglect of a director, manager, secretary or other officer of the company, with the burden of specifically pleading in the complaint and proving such elements resting upon the complainant. 

Essential Averments in Complaint

It is mandatory for a complaint under Section 141 of the NI Act to specifically aver that, at the time of commission of the offence, the person sought to be made liable was in charge of and responsible for the conduct of the business of the company. Such an averment is an essential requirement and, in its absence, the requirements of Section 141 cannot be said to be satisfied. 

Vicarious Liability under NI Act

Section 141 constitutes an exception to the general rule against vicarious liability in criminal law and, therefore, must be strictly construed. It was held that bald assertions such as a person being involved in ―day-to-day affairs or ―managing the company are, by themselves, insufficient to satisfy the statutory requirement of being ―in charge of and responsible for the conduct of the business of the company at the relevant time. 

Implicating a Person as Accused

For implicating a person under Section 141(1) of the NI Act, the complaint must contain specific averments demonstrating that such person was, at the time of commission of the offence, both in charge of and responsible for the conduct of the business of the company. The emphasis is not merely on participation or involvement, but on control and responsibility in relation to the business of the company.

Examining the Role of Accused

After noting that a perusal of the complaint shows that while accused no. 2 has been described as the sole Director of accused no. 1-company, the only allegation against the petitioner (accused no. 3) is that he was ―involved in the day-to-day business activities‖ of the company and was ―acting under the instructions of accused no. 2 it was seen that apart from these assertions, the complaint contains certain common allegations against accused nos. 2 and 3 regarding the transaction in question, including approaching the complainant, inducing her to invest money and handing over of the cheque, it was pointed out that even if the allegations in the complaint are assumed to be true for the sake of argument, the petitioner's alleged role in accompanying accused no. 2, inducing the complainant, or handing over the cheque – whether as a friend, associate or agent – would not, by itself, be sufficient to attract liability under Section 141(1) of the NI Act. The said provision applies only to persons who are in charge of and responsible for the conduct of the business of the company, and the complaint must contain specific averments to that effect, either expressly or at least in substance.

The Complaint with respect to one of the accused was quashed.