Notice to Directors I

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 its affairs. In our view, Section 138 does not admit of any necessity or scope for reading into it the requirement that the Company Directors in question must also be issued individual notices under Section 138.”

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