LALIT KUMAR SHARMA vs STATE OF U.P.

The Supreme Court addressed the applicability of Section 138 of the Negotiable Instruments Act, 1881, in a case involving dishonored cheques issued by a company. The Court held that the directors of the company, who were not signatories to the cheques, could not be held liable under Section 138, as they did not have the requisite authority at the time the cheques were issued. The appeal was allowed, and the High Court's order summoning the appellants was set aside, establishing that mere directorship does not equate to liability for dishonored cheques without direct involvement in the transaction.