Petitioner Can’t Be Held Liable for Dishonour u/s 138 of NI Act as He Wasn’t a Director of Accused Company, Drawer of Cheque | HC

Case Details: Sanjay Dhingra v. Woori Bank, Gurgaon Branch - [2025] 171 taxmann.com 525 (HC-Delhi)

Judiciary and Counsel Details

• Amit Mahajan, J.
• Karan Batura & Jayant Chawla, Advs. for the Petitioner.
• Rohit, SI for the Respondent.

Facts of the Case

In the instant case, the Respondent bank extended a loan to the company, i.e., ‘KL’. Since ‘KL’ persistently neglected to repay the principal, interest and charges in respect of a loan, a legal notice was sent to ‘KL’ to make an outstanding payment.

Subsequently, the employees of the complainant visited the office of ‘KL’ wherein the petitioner, the managing director of ‘KL’, handed over the cheque for the sum due. The said cheque was issued by ‘D’ and signed by ‘K’, who was stated to be the director ‘D’.

However, the said cheque was dishonoured on presentation and, a complaint was filed under section 138 of the Negotiable Instruments Act, 1881. The Metropolitan Magistrate (MM) vide the order, issued summons to the petitioner for an offence under section 138 of the Act.

It was noted that the cheque had been handed over by the petitioner, who was the director of ‘KL’, but the same was not drawn by ‘KL’ and, the subject cheque had been duly executed and issued by D.

High Court Held

The High Court observed that as per section 138 of the Act, the liability was to be imputed on the person who draws the cheque on an account maintained by them.

The High Court held that since the petitioner was not the director of the accused company i.e., D, who was the drawer of the subject cheque, the petitioner could not be made liable for an offence under section 138 of the Act. Therefore, the impugned order summoning the petitioner and proceedings emanating from the complaint case for an offence under section 138 of the Act were to be quashed.

List of Cases Referred to

• Rathish Babu Unnikrishnan v. State (NCT of Delhi) 2022 SCC OnLine SC 513 (para 14)
• S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla: (2005) 8 SCC 89 (para 18)
• National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal: (2010) 3 SCC 330 (para 19).