Recently in the case of Saroj Pandey v. Govt. of NCT of Delhi, the Supreme Court has held that merely signing a board resolution is not enough to make a director criminally liable in a cheque dishonour case under Sections 138 of the Negotiable Instruments Act, 1881.

The Court quashed proceedings against a director who had been summoned only because she was a director and had signed a board resolution.

The Court reiterated that, to prosecute a director under Section 141 of the Negotiable Instruments Act, 1881, the complaint must specifically state that the director was:

• in charge of the company’s day-to-day affairs; and 
• responsible for the conduct of its business at the time of the offence. 

The Supreme Court clarified that signing a board resolution ordinarily reflects involvement in broad policy or strategic decisions, not necessarily knowledge of, or participation in, daily business operations. Therefore, signing such a resolution by itself cannot justify an inference that the director was responsible for the cheque transaction in question.