Dishonour of cheques: Is it necessary to charge a firm in order to find directors guilty?

On Friday, the Supreme Court decided to hear a petition asking whether business directors may be held accountable for forging a check without including the company as a party in the legal action [Rarichan PJ v. KP Varghese].

The Kerala High Court’s decision in which the petitioners were found guilty of violating Section 138 of the Negotiable Instruments (NI) Act was appealed, and a bench of Justices BR Gavai and Vikram Nath gave notice of their decision.

The petitioners were unfairly accused by the complainant who fraudulently lent money and utilised checks issued by the petitioners as security for monies, according to a petition submitted by advocates Sriram Parakkat, Shyam V, and MS Vishnu Shankar.

This news is written by Ms. Amrita Singh, Research Assistant, All India Legal Forum.