Directors Can’t Skip Liability For Cheque Dishonour Merely Because Company Is Declared Insolvent: Orissa HC

Cuttack: The Orissa High Court has held that directors of a company cannot escape liability for the offence of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881 merely because the company was declared insolvent and a Resolution Professional was appointed under the Insolvency and Bankruptcy Code, 2016.

The High Court was considering an application seeking issuance of summons to the Resolution Professional to represent one accused and to discharge another. ADVERTISEMENT

While determining the extent of liability of directors of an insolvent company, the Bench of Justice Chittaranjan Dash held, “In view of the above position of law, there remains no ambiguity with respect to the principle propounded by the Hon’ble Supreme Court, namely, that the matter lying before