A non-signatory director may face Section 138 prosecution where specific Section 141 averments establish responsibility.

The petitioner, Mona Jain, was one of the two directors of Monica Gold Pipes Pvt. Ltd. (“the Company”), which had purchased material from the respondent and allegedly remained liable for ₹12,55,737.

In December 2024, the petitioner and the other director issued four cheques towards the Company’s liability; three were dishonoured, while one cheque for ₹53,000 was honoured.

After the respondent issued a legal notice dated 8 January 2025, the Company issued three fresh cheques, which were also dishonoured. A second legal notice dated 8 April 2025 was thereafter issued.

The respondent filed a complaint under Sections 138 and 141 of the Negotiable Instruments Act, 1881 (“NI Act”), against the Company and its directors, including the petitioner as Accused No. 2.

The Magistrate issued the summoning order dated 27 September 2025. The petitioner sought quashing of the summoning order and consequential proceedings under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Whether the complaint contained the requisite factual averments under Section 141 of the NI Act to make the petitioner, a director and non-signatory to the cheques, vicariously liable for the Company’s alleged offence under Section 138.

Whether the petitioner had produced sterling, incontrovertible, or unimpeachable material showing that she was not concerned with the Company’s day-to-day affairs, thereby warranting quashing of the proceedings at the summoning stage.

The Court applied Sections 138 and 141 of the NI Act.

Section 141 imposes vicarious liability only upon persons who, at the relevant time, were in charge of and responsible for the conduct of the company’s business; mere directorship does not create automatic criminal liability.

Relying on National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330, the Court reiterated that the complaint must contain the necessary averment regarding the accused’s responsibility for the company’s business, although such specific averments are generally unnecessary for a managing director or a director who signed the cheque.

Under S.P. Mani & Mohan Dairy v. Snehalatha Elangovan, (2023) 10 SCC 685, once the basic averment is made and process is issued, quashing is justified only where the accused produces sterling and incontrovertible material demonstrating that continuation of the prosecution would amount to an abuse of process; disputed questions concerning the director’s actual role ordinarily must be decided at trial.

The Court exercised its inherent jurisdiction under Section 528 of the BNSS in accordance with these principles.

The complaint expressly alleged that the petitioner and the other director were in charge of the Company’s day-to-day affairs and personally involved in its dealings with the respondent.

It attributed specific conduct to them, including purchasing material, issuing the original and fresh cheques, instructing their presentation, giving assurances after dishonour, and acknowledging the outstanding liability.

The complaint therefore did not rely merely on the petitioner’s designation as a director but pleaded the statutory basis for vicarious liability under Section 141.

The petitioner’s assertion that she was not involved in the Company’s day-to-day affairs raised a disputed question of fact and was unsupported by any unimpeachable material.

The fact that she was one of only two directors further supported allowing the prosecution to proceed, subject to proof at trial.

Her status as a non-signatory to the cheques was not decisive because a non-signatory director may be prosecuted where the complaint contains the requisite averments concerning responsibility for the Company’s business and attributes relevant acts to that director.

Her defence that she was not involved in the Company’s affairs, and that she was not a cheque signatory, could not be adjudicated in proceedings for quashing and had to be tested at trial.

The petition under Section 528 BNSS was dismissed, along with the pending applications, and the summoning order dated 27 September 2025 and consequential proceedings were allowed to continue.