Dishonoured Cheques - Not All Directors?

Background

The long-standing issue of undisposed pending cases of cheque dishonour in terms of Section 138 of the Negotiable Instruments Act, 1881 ("said Act") continues unabated and a common grey area amongst such cases has been the issue of correctly identifying the persons who can be held liable for the same.

Recently, the Hon'ble Supreme Court in Ashutosh Ashok Parasrampuriya and Anr. v. M/s Gharkul Industries Pvt. Ltd. & Ors¹ inter alia held that the directors of a company can only be held liable for offences committed by the company when there are specific averments made that such directors were at the time of offence, responsible for conduct of the said company's business.