Indira Gandhi Memorial General Marketing Society Ltd. v. Roys Abraham

The Cyber Blog IndiaCase Summary

Liability of a company director under Section 85 of the Information Technology Act, 2000 in a case of cheque dishonour

Indira Gandhi Memorial General Marketing Society Ltd. v. Roys Abraham
(2017) 3 KLT 858
In the High Court of Kerala
Crl. M.C. 497/2015
Before Justice Alexander Thomas
Decided on June 15, 2017

Relevancy of the case: Liability of a company director under Section 85 of the Information Technology Act, 2000 in a case of cheque dishonour

Statutes and Provisions Involved

  • The Information Technology Act, 2000 (Section 85)
  • The Negotiable Instruments Act, 1881 (Section 141)
  • The Code of Criminal Procedure, 1973 (Section 319)

Relevant Facts of the Case

  • The case involves the petitioner and respondents as the director and the company’s representative M.S Abraham Varghese and Co. to have jointly committed the offence under the Negotiable Instruments Act, 1881, presented before the Magistrate Court of Kottayam.
  • The vicarious liability given under Section 141 of the Negotiable Instruments Act, 1881 holds the company’s Director or Managing Director liable.
  • The first respondent issued a dishonoured cheque worth ₹6,75,000, on behalf of the second respondent.
  • The director of the company arrayed for the dishonour of the negotiable instrument was tried under Section 85 of the Information Technology Act, 2000 enumerating offences committed by companies.
  • The petitioner seeks remedy for losses.

Opinion of the Bench

  • The Court was of the view that Section 85 of the Information Technology Act, 2000 is in pari materia with Section 141 of the Negotiable Instruments Act, 1881 and hence there is no liability of the Director or that of the Company cannot be held liable under Section 85 of the Information Technology Act, 2000. Further, the Court observed that the offence has already been committed and the offender can be prosecuted only when the requirements of Section 138 of the Negotiable Instruments Act, 1881 are met.

Final Decision

  • Petition dismissed.

This case summary has been prepared by Tuba Aftab, an undergraduate student at IIMT & School of Law, GGSIPU, during her internship with The Cyber Blog India in May/June 2021.