Latest JudgementNegotiable Instrument Act, 1881Code of Criminal Procedure, 1973

Saroj Pandey v. Govt. of NCT of Delhi, 2026

The judgment reinforces the principle that criminal liability cannot be imposed vicariously without strict compliance with statutory requirements.

Supreme Court of India·13 April 2026

Court

Supreme Court of India

Date of Decision

13 April 2026

Judges

Justice Sanjay Karol & Justice Augustine George Masih

Citation

Acts / Provisions

Sections 138, 141, and 142 of the Negotiable Instruments Act, 1881 Section 482 of the Code of Criminal Procedure, 1973

Facts of the Case

A complaint was filed under the Negotiable Instruments Act due to dishonour of three cheques issued by a company for payment related to iron and steel.
The cheques were dishonoured on grounds of signature mismatch and alterations.
A legal notice was issued, followed by summons against the company and its directors.
The appellant, a director of the company, challenged the summoning order.
The revisional court and High Court refused to quash proceedings, reasoning that her signing of a Board Resolution indicated involvement in day-to-day affairs.
The appellant approached the Supreme Court seeking quashing of criminal proceedings.

Whether mere directorship or signing of a Board Resolution is sufficient to establish liability under Section 138 read with Section 141 of the Negotiable Instruments Act?
Whether specific averments regarding a director’s role in day-to-day business are necessary to prosecute under the Negotiable Instruments Act?
Whether a petition under Section 482 CrPC is maintainable after dismissal of a revision petition on similar grounds?

The Court held that mere signing of a Board Resolution does not establish involvement in day-to-day affairs of the company.
It reiterated that Section 141 NI Act requires specific averments showing that the accused was in charge of and responsible for the conduct of business.
The Court emphasized that designation as a director alone is insufficient to attract liability.
It observed that Board Resolutions relate to policy decisions, not routine operational activities.
The absence of specific allegations regarding the appellant’s role was held to be fatal to prosecution.
The Court rejected the High Court’s reasoning and quashed the criminal proceedings against the appellant.
It clarified that Section 482 CrPC can still be invoked even after revision, to prevent miscarriage of justice.
The ruling was limited to the appellant and did not affect proceedings against other accused persons.

Mere directorship or signing a Board Resolution is insufficient for prosecution under Section 138 NI Act.
Specific allegations of responsibility in day-to-day affairs are mandatory.
Proceedings against the appellant were quashed.
Section 482 CrPC remains available despite prior revision proceedings.

The judgment reinforces the principle that criminal liability cannot be imposed vicariously without strict compliance with statutory requirements.
It strengthens safeguards for independent and non-executive directors, preventing misuse of cheque dishonour provisions.
The Court maintained consistency with prior precedents like:
- N. Vijay Kumar v. Vishwanath Rao N.
- K.S. Mehta v. Morgan Securities & Credits (P) Ltd
- Hitesh Verma v. Health Care at Home (India) (P) Ltd
It clarifies the distinction between policy-level participation and operational control.
The ruling prevents mechanical prosecution of directors and promotes fair criminal jurisprudence.
It also reaffirms the wide scope of inherent powers under Section 482 CrPC.