Negotiable Instruments Act 1881

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The “Security” Defence in Cases relating to Dishonour of Cheques – Not a Get-Out-Of-Jail-Free Card

INTRODUCTION

The Supreme Court, in the case of Sripati Singh vs. The State of Jharkhand & Anr[i], has provided much needed clarity on the often-used defence of a cheque having been issued as ‘security’ in proceedings under the Negotiable Instruments Act, 1881 (the Act). The Court held that a cheque issued by way of security, if dishonoured, would attract the provisions of the Act, if the same is issued in consequence of a legally enforceable debt, which has become recoverable at the time of its presentation.Continue Reading The “Security” Defence in Cases Relating to Dishonour of Cheques – Not a Get-Out-Of-Jail-Free Card

Prakash Gupta Judgment – Has the Supreme Court given more Powers to SEBI in the Matter of Compounding

Introduction

The Securities and Exchange Board of India Act, 1992 (“SEBI Act”) was essentially introduced to protect the interests of investors and to regulate and promote the development of the securities market in India. As a direct consequence of this legislative intention, the SEBI Act lays down that contravention, attempt to contravene and abetment of contravention of the provisions of the SEBI Act would be punishable with imprisonment and fines of varying quantum.Continue Reading Prakash Gupta Judgment – Has the Supreme Court given more Powers to SEBI in the Matter of Compounding

Vicarious Liability of Non-Executive Directors - A Case for Reform of Law

Context:

The vicarious liability provisions have been evolving ever since the evolution of law of torts. “Offence by companies” is a standard vicarious liability provision in most statutes, which is often used to fasten the liability on directors for the acts and omissions of the company. These vicarious liability provisions are borrowed from colonial-era laws and incorporated in our domestic legislations. As a rule, there is no concept of vicarious liability in criminal law. Such provisions imposing liability on directors for acts/ omissions of the company are present in most statutes.

The vicarious liability provisions have a standard language providing that the person-in-charge of and responsible for the conduct of the business of the company at the time of the commission of the offence, as well as other officers are liable for that offence. However, those provisions do not make a distinction between Managing Directors (“MDs”)/ Executive Directors (“EDs”) and Non-Executive Directors (“NEDs”)/ Independent Directors (“IDs”).
Continue Reading Vicarious Liability of Non-Executive Directors: A Case for Reform of Law