Liability of Partner in a Cheque Bounce Case
By Team Legistify / 2016-04-29
The law specefically in case of offence by companies is such that If the person committing an offence under section 138 of the Negotiable Instruments Act is a company, every person who, at the time the offence was committed, was in charge of and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly

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Section 138 of the Negotiable Instruments Act provides for statutory relief to what has been a perennial issue in transactions via cheques as instruments of money or currency exchange.

Section 138- 142 of the Act lay down all the obligations of the Issuer/ Drawer/ Maker of a cheque to ensure that the person or organisation has enough balance to ensure the transaction goes through successfully as well as to ensure there are proper overdraft facilities for the particular account to ensure in certain cases that the transaction does not get declined for any reason, especially for the 'lack of sufficient funds'.

The law specifically in case of offence by companies is such that If the person committing an offence under Section 138 of the Negotiable Instruments Act is a company, every person who, at the time the offence was committed, was in charge of and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

As such, Every director of the company is not automatically vicariously liable for the offence committed by the company, only such director or directors who were in charge of and responsible to the company for the conduct of the business of the company at the material time shall be deemed to be guilty.And there must be a specific averment in the complaint that at the time the offence was committed, the person accused was in charge of and responsible for the conduct of the business of the company. You can consult the best cheque bounce lawyers in India to know more.

Understanding the basics of Section 138- Criminal liability for drawer/ maker of cheque

The law specefically in case of offence by companies is such that If the person committing an offence under section 138 of the Negotiable Instruments Act is a company, every person who, at the time the offence was committed, was in charge of and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly

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