S. 138 of negotiable instrument act

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 May 2012 IF A a listed company has issued the cheque to B company but when B company has deposited the cheque it was dishonoured due to stop payment instructions given by A company. Now, is Mr. C, who is working as company secretary in A ltd, is liable for the offence under section 138 of Negotiaible instrument act??

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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21 May 2012 When a cheque issued by a company is dishonoured. In addition to the
Company, the following persons are deemed to be guilty of the offence and shall be liable to be proceeded against and punished:
a. 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;
b. Any Director, Manager, Secretary or other officer of the company with whose consent and connivance, the offence under section 138 had been committed; and
c. Any Director, Manager, Secretary or other officer of the company whose negligence resulted in the offence under section 138 being committed by the company