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Abhay Nevagi & Associates

Vicarious liability of director of a company in an offence under section 138 of the Negotiable Instruments Act 1881 – The Present Position

Section 138 of the Negotiable Instruments Act, 1881(for short “NI Act” or “the said Act”) makes dishonor of cheques for insufficiency of funds in the account a criminal offence. Section 141 of the said Act, in case of offence by Company, provides for vicarious liability on every person who, at the time the offence was committed, was in charge of, and was responsible to the Company for the conduct of the business of the Company.