Negotiable Instruments Act, 1881

Additional Information for Section 138 Cheque Dishonour Complaints Against Companies

When a cheque issued on behalf of a company is dishonoured, a complaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 may require particulars establishing the company's liability and the role of the persons sought to be prosecuted.

Legal background: Sections 138 and 141

Section 138 deals with dishonour of cheques for insufficiency of funds or where the amount exceeds the arrangement with the bank, subject to statutory conditions. Section 141 addresses offences committed by companies and the circumstances in which persons responsible for the conduct of the company's business, as well as specified officers, may be liable.

Merely naming a person as a director does not automatically establish criminal liability. The complaint should contain the necessary allegations regarding responsibility for the conduct of the company's business at the relevant time, or consent, connivance or neglect, as applicable. The position of a managing director, joint managing director or cheque signatory may be assessed differently under the governing case law.

Delhi High Court directions on additional particulars

In proceedings identified as CRL.M.C. 1821/2013 and CRL.M.C. 1822/2013, the Delhi High Court addressed the need for magistrates dealing with complaints under Sections 138 and 141 to have adequate information about persons sought to be held vicariously liable for an offence allegedly committed by a company. The directions referred to copies of Form No. 32 and a separate statement of relevant particulars accompanying the complaint.

Current company records: Form No. 32 is a historical filing under the earlier company-law regime. For companies governed by the Companies Act, 2013, director appointment and cessation information is generally reflected in MCA records and filings such as Form DIR-12. The appropriate records depend on the period in question. A historical court direction referring to Form No. 32 should not be read as requiring a form that is no longer used for new filings.

Information to accompany the complaint

The following checklist reflects the information described in the directions and is useful for preparing a complaint involving an accused company.

1. Accused company

Full legal name of the accused company and relevant identifying particulars.
Available records showing the directors and relevant officers at the time of the alleged offence and, where pertinent, when the complaint was filed.

2. Particulars of the dishonoured cheque or cheques

Name of the person or company in whose favour each cheque was issued.
Name of the drawer of the cheque.
Date of issue of each cheque.
Name and location of the drawer bank and the bank to which the cheque was presented.
Cheque number or numbers and amounts.
Name and capacity of the person who signed each cheque.

3. Reason for dishonour

Specify the reason recorded by the bank for returning each cheque, supported by the relevant cheque return memo.

4. Persons sought to be held vicariously liable

State the name and designation of each individual accused and describe the person's specific role, including how and in what manner that person was responsible for the conduct of the company's business at the relevant time or otherwise attracted liability under Section 141.

5. Statutory demand notice

Give the date, addressee, method of dispatch, delivery or service details and available proof of the legal demand notice. Under Section 138, the payee or holder in due course must ordinarily issue a written demand within 30 days of receiving information from the bank about dishonour, and the drawer has 15 days from receipt of the notice to make payment.

6. Reply to the notice

Provide particulars of any reply received from the drawer or other notice recipient, and retain a copy where available.

Other filing considerations

Subject to applicable law, the complaint must be filed within one month from the date on which the cause of action arises under clause (c) of the proviso to Section 138, with the possibility of condonation of delay under Section 142. Territorial jurisdiction is governed by Section 142(2), read with Section 142A where applicable. Electronic evidence and bank records should be prepared in accordance with the evidentiary law applicable to the proceedings.

The exact documents required can vary with the facts, applicable court rules and judicial directions. This checklist supplements, rather than replaces, the statutory requirements and the complaint's necessary averments.

Related formats and guidance

For drafting assistance, refer to the format of a legal notice under Section 138, the criminal complaint format, the complainant's evidence affidavit format and the additional information annexure format.

This article is general legal information and should be checked against current statutes, case law and local filing requirements before use.