S.138 / 141 - Directors liable / not liable / liable / not liable / liable / not liable, the Apex Court judgments creating confusions, causing serious prejudice
With a view to enhance the acceptability of cheques in settlement of liabilities, the Parliament of India, in the year 1988, introduced the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, by which the dishonourment of cheque was made a punishable offence. Whereas the aforesaid Amendments failed to produce the desired results, further Amendments (Sections 143 to 147 were added) were made so as to fill the gaps found in the earlier Amendments. 1. The entire edifice of Section 138 proceedings is founded on “Civil Liability”, i.e. “legally enforceable debt”. 2. Section 141 of Act, among other things, provides that all persons, including directors of the Company, who were in-charge of and responsible to the Company for the conduct of the business of the Company, shall be deemed to be guilty of offence. 3. Section 141 of the Act enacts vicarious crimi...