SLP(Crl) No. 002835 - / 2020

Under Section 138 of the Negotiable Instruments Act, a person cannot be fastened with liability merely by virtue of being a Director at the time a cheque is dishonoured unless they were also a signatory to the cheque; the requirement of statutory notice and nexus to the offence must be established. As analysed on casestatus.in, failure by the High Court to address this prima facie ground while rejecting a discharge application warrants interference and stay of proceedings.