In a recent ruling, the Orissa High Court observed that directors of a company cannot escape criminal liability for cheque dishonour merely because the company has been declared insolvent.
Syed Najam Ahmed, the petitioner and Managing Director of Zenith Mining Private Limited, filed a petition before the High Court challenging the order of the JMFC (LR), Bhubaneswar, which had rejected his plea for discharge in a complaint filed under Section 138 of the Negotiable Instruments Act, 1881.
The complaint had been filed by Dewy Developers Private Limited, which alleged that the petitioner’s company had taken a friendly loan of Rs. 1 crore but failed to repay it. A cheque issued towards repayment was dishonoured twice…