Dishonour of Cheque--Vicarious Liability --Directors Cannot be held Liable Without Impleadment of Company
Under Section 141 of the Negotiable Instruments Act, prosecution of directors for cheque dishonour is contingent upon arraignment of the company as an accused. Commission of the offence by the company is a condition precedent to fastening vicarious liability on its directors or officers. Where the company that issued the cheque is neither made an accused nor served notice as an accused entity, criminal proceedings against directors cannot sustain. Issuance of notice to a director in his personal capacity does not substitute for impleadment of the company.
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