A company commits an offence under section 138 of the Negotiable Instruments Act, 1881. Subject to the…
Section 141(1) looks to whether the person was in charge of and responsible to the company for conducting its business when the offence occurred. Under the first proviso, a…
Choose your answer
A company commits an offence under section 138 of the Negotiable Instruments Act, 1881. Subject to the provisos, which circumstance can make a director liable under section 141(1)?
Answer and explanation
Correct answer A
Section 141(1) looks to whether the person was in charge of and responsible to the company for conducting its business when the offence occurred. Under the first proviso, a person can avoid punishment by proving lack of knowledge of the offence or that they exercised all due diligence to prevent it.
Option feedback
Option A
Section 141(1) uses both business responsibilities at the time the offence was committed.
Option B
The filing date cannot replace the time of the offence for the general rule in section 141(1).
Option C
Shareholding alone does not establish responsibility for conducting the company’s business.
Option D
A board seat alone does not meet the general section 141(1) test.
Practice for these exams
-
All India Bar Examination (AIBE)
Subject revision
See pack details on LawMint.net -
UGC NET Law
Subject revision
See pack details on LawMint.net -
Madhya Pradesh Judicial Services
-
CUET PG Law (LL.M.)
Subject revision