The Supreme Court has quashed criminal proceedings against Saroj Pandey, holding that mere designation as a director does not automatically imply responsibility for a company’s day-to-day operations.
The bench of Justice Sanjay Karol and Justice Augustine George Masih, set aside earlier orders of the Delhi High Court and lower courts that had refused to quash summons issued against Pandey under the Negotiable Instruments Act, 1881.
The case stemmed from a complaint filed under Sections 138 and 142 of the Negotiable Instruments Act, relating to the dishonour of three cheques totaling ₹50 lakh issued by Projtech Engineering Private Limited. The cheques, dated April 20, 2021, were allegedly issued as payment for iron and steel supplies but were returned unpaid due to discrepancies in signatures and alterations.
Following legal notices, criminal proceedings were initiated, and summons were issued by a Metropolitan Magistrate in September 2021. Saroj Pandey, one of the directors of the company, challenged the proceedings, arguing that she was not involved in the day-to-day affairs of the company.
Both the Sessions Court and the Delhi High Court had dismissed her plea. The courts relied on the fact that Pandey had signed a board resolution, interpreting this as evidence of her involvement in the company’s operations. The High Court further held that once a revision petition had been filed, invoking inherent powers under Section 482 of the Criminal Procedure Code was limited.
The Supreme Court disagreed with this reasoning, emphasizing that directorship alone is insufficient for criminal liability under Section 141 of the Negotiable Instruments Act. There must be specific allegations and evidence showing that the accused was in charge of and responsible for the conduct of the company’s business at the time of the offence. Signing a board resolution does not establish involvement in daily operations, as such resolutions typically concern broader policy decisions rather than routine business activities.
The Court noted a complete absence of direct allegations in the complaint linking Pandey to the issuance of the dishonoured cheques or the company’s daily management.
The bench also clarified that limitations on revisional jurisdiction do not curtail the High Court’s inherent powers to prevent miscarriage of justice.
The Supreme Court quashed all proceedings against Saroj Pandey. However, it clarified that the trial against other accused persons would continue unaffected.
Case Details
Case Title: Saroj Pandey Versus Govt. Of NCT Of Delhi And Ors
Citation: JURISHOUR-646-SC-2026
Case No.: Special Leave Petition (Crl.) No. 21322 of 2025
Date: 07/04/2026
