Related to Section 138 of Negotiable Instruments Act, 1881
15 Nov 2013, 18:05
Dear Sir/madam,
What action can be taken if the cheque that has been dishonoured by the bank is signed by a Director of the Company who had recently resigned from the capacity of the Director? Can Section 138 be made applicable? Can that Company and its active directors be sued u/s 138 of Negotiable Instruments Act?
2 Replies
Please clarify What are the grounds for dishonour. is it insufficient funds or is it technical system failure or is it stop payment by the issuer????
It is stop payment by the issuer. But the records show that the director who has signed the cheque had already resigned from the post of director 10 days before issuing the cheque.