Director not vicariously liable under Section 138 NI Act for cheque bouncing if company acquitted: Kerala High Court

"When the company is found not guilty of the offence alleged, the Managing Director cannot be held vicariously liable for the offence," the High Court observed.
Cheque, Kerala High Court
Cheque, Kerala High Court

The Kerala High Court recently held that when a company is not convicted for the offence of cheque bouncing under Section 138 of the Negotiable Instruments Act (NI Act), its Directors cannot be held vicariously liable for the same offence [Afsal Hussain v KS Muhammed Ismail & Anr.].

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