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Director can't be tried without company

Prosecution of a director of a company for issuing a cheque which bounces cannot be sustained if the company is not made a party, the Supreme Court has ruled while setting aside the decision of the Delhi High Court in the case, Anil Gupta vs Star India Ltd. In this instance, a cable television distributor issued three cheques to Star India, which bounced. It filed criminal complaints under Section 138 and 141 of the Negotiable Instruments Act to the distributing company and the director. They moved the high court to quash the complaint on the ground of limitation. The high court quashed the complaint against the company but allowed the prosecution of the director, though he had argued that he was only vicariously liable for the default. He moved the Supreme Court. It relied upon earlier decisions and emphasised that proceedings against a director cannot be continued in the absence of the company.

CRIMINAL APPEAL NO.1364 OF 2014
Anil Gupta vs Star India Pvt. Ltd. & Anr

 Article referred: http://www.business-standard.com/article/opinion/new-employer-to-pay-pf-penalty-114072000755_1.html

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