The Delhi High Court has held that the mere fact that a cheque was drawn on the personal account of a director does not automatically absolve a company of liability under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’) at the summoning stage. Justice Anup Jairam Bhambhani observed that if such a cheque is linked to a personal guarantee for company obligations, it is not possible to infer at the preliminary stage that it wasn’t issued to discharge a debt owed by the company.
Background
The petitioner, SRK Devbuild Pvt Ltd (appearing through its Liquidator), sought the quashing of a summoning order dated August 23, 2018, issued by the Metropolitan Magistrate-01, Patiala House Courts. The criminal complaint…