Notice to Directors

My Lord, Is a notice under Section 138 of the Negotiable Instruments Act, 1881 (“Act”) mandatorily required to be sent to the Directors of a Company before a complaint could be filed against such Directors along with the Company?

The notice under Section 138 is required to be given to “the drawer” of the cheque so as to give the drawer an opportunity to make the payment and escape the penal consequences… There is nothing in Section 138 which may even remotely suggest issuance of notice to anyone other than the drawer… The opportunity to the ‘drawer’ Company is considered good enough for those who are in charge of the affairs of such Company. In our view, Section 138 of the Act does not admit of any necessity or scope for reading into it the requirement that the Directors of the Company in question must also be issued individual notices under Section 138 of the Act.”

Hon’ble Justice U.U. Lalit, Krishna Texport & Capital Markets Ltd. v. A. Agrawal, [Criminal Appeal No.1220 of 2009].

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