SC QUASHES COMPLAINT AGAINST DIRECTOR IN CHEQUE DISHONOUR

CASE

In a landmark judgment dated March 15, 2024, the Supreme Court of India has delivered a
significant verdict, setting aside criminal proceedings against an appellant director accused of
dishonouring a cheque. The case, Susela Padmavathy Amma v. M/s. Bharti Airtel Limited
(Crl.A. No.1577-1578/ 2024), marks a pivotal moment in legal discourse regarding directorial
responsibilities and cheque dishonour cases.

Key Points:

Background: The appellant director took her plea to the Apex Court after facing rejection
from the Madras High Court in 2022. Central to her defense was the assertion that the
complaints lacked specificity regarding her role in the company's affairs and her connection
to the dishonoured cheque.

Lack of Averment: The Supreme Court observed a critical deficiency in the complaints -
they failed to aver that the appellant director was responsible for the day-to-day operations of
the company. Furthermore, she was not even listed as a signatory to the disputed cheque.

Court's Ruling: Upholding the appellant's contentions, the Supreme Court noted the absence
of any mention portraying her as having control over the company's affairs. Neither was there
any indication that she held a position such as managing director or joint managing director.

Legal Implications: This judgment holds far-reaching implications for future cases involving
cheque dishonour allegations. It reinforces the principle that mere directorship does not
automatically implicate an individual in the day-to-day activities of a company, especially
concerning financial transactions.

Protecting Directors' Rights: The verdict underscores the importance of clarity and
specificity in legal complaints, safeguarding the rights of directors against vague or
unsubstantiated allegations.

Outcome: With this decision, the Court has not only provided relief to the appellant director
but also set a precedent for similar cases, emphasizing the need for clear allegations backed
by evidence.
Future Perspectives: This ruling is likely to prompt a reevaluation of legal strategies in
cheque dishonour cases, prompting litigants to ensure thorough documentation and precise
allegations to avoid dismissal on technical grounds.

In conclusion, the Supreme Court's decision to quash the complaint against the appellant
director in the cheque dishonour case serves as a beacon of clarity and fairness in the legal
landscape. It reinforces the fundamental principle of justice: allegations must be specific,
substantiated, and aligned with legal standards to hold individuals accountable.