The Karnataka High Court has quashed a cheque dishonour complaint under Section 138 of the Negotiable Instruments Act against a man after referring to official records showing that he was not a director of the company at the time the disputed cheques were issued.
The case involved two cheques dated 27.09.2014 and 29.09.2014, which were the subject of a complaint. The petitioner, Sujith Sudhakaran, challenged the proceedings on the ground that he was not involved in the affairs of the company when those cheques were issued.
Referring to the Ministry of Corporate Affairs records, the Court noted that although the petitioner had been a director earlier, he ceased to be a director on 08.04.2013 and only rejoined the company after the dates on which the cheques were issued. During the interregnum, he was neither a director nor engaged in company activities, and the cheques were not signed by him.
On this basis, the bench of Justice M. Nagaprasanna held that because the petitioner was not a director, additional director, or involved in the company’s business when the instruments were issued, he could not be held liable under Section 138. The complaint against him was accordingly quashed.
