Share allotment

This query is : Resolved

ravindra (Querist)
Follow

05 May 2017 Dear All

Please Clear the below:

Can we allot shares to promotores of private limited company without clearing cheque of shares value.

As cheque issued on 22.03.2017 and cleared in next month in april-2017, can we allot shares against this cheque before 31.03.2017.

please help

Regards
Virendra Kumar

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
Follow

05 May 2017 Under the Negotiable Instruments Act, 1881, a cheque is an instrument negotiated by delivery. The drawer is discharged when payment is made in due course. In simple terms, this means when the cheque is tendered, there is a presumption that payment would be realised in due course, and, hence, the date of payment is considered to be the date on which the cheque is delivered, regardless of when it is actually presented for payment. This principle would not apply in the event of the cheque getting dishonoured. Thus, the date of tendering is to be considered the date of payment, just like a cash payment. This is the legal interpretation enunciated by the Supreme Court.

Applying the above interpretation, in your case you can allot the shares before 31.03.2017