Experts & Views
Can anyone please advise on sec 138, if a PDC cheque is bounced on account of EMI, signed by a director of a pvt limited company, the loan was a commercial loan by the bank, wherein due to business loss the company could not pay the EMI amount when due. the cars were repossessed and sold by the bank for a considerable amount, can the director be prosecuted for cheque bounce under sec 138 and what are the implications of sec 142 of N.I Act.
By reading the comments you agree that they are the (often anonymous) personal views and opinions of readers, which may be biased and unreliable, and for which Legally India therefore has no liability. If you believe a comment is inappropriate, please click 'Report to LI' below the comment and we will review it as soon as practicable.
threads most popular
thread most upvoted
comment newest
first oldest
first
Your matter does not fall under the category of offences u/s 138 of the Negotiable Instrument Act so just don't worry. It may be proceeded under recovery cases only.
The courts have set precedents in such matters and also distinguished what may be termed "liability" u/s 138 and security otherwise falling out side of the said section.
Please follow this case Ramkrishna Urban Co Operative vs Shri Rajendra Bhagchand Warma on 16 February, 2010, N THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD, CRIMINAL APPLICATION NO. 898 OF 2009, PRONOUNCED ON : 16.02.2010.
Thus you are liable for prosecution u/s 138 of NI act.
Still at the time of hearing of the case, you depose before the court taht you are agreed to pay the said amount and pay it off. The case then would be disposed off.
In spite of the fact that the liability is against the Company, the directors who were in charge of those transactions shall be prosecuted.
threads most popular
thread most upvoted
comment newest
first oldest
first