Dear Sir,
Section 138 of the Negotiable Instruments Act provides that offence of dishonour of cheque shall be deemed to be committed if a few conditions are satisfied. One of the conditions is that the drawer should make a payment through cheque either in whole or in partial discharge of a legally enforceable debt.
I would like to know that if a person issues a cheque towards application of shares in a company, the company is required to deposit the application money into a separate bank account. Upon such drawing, if the cheque bounces, will the applicant be held guilty under Section 138 of NIA even if no shares were allotted to him? Can the company claim that there exists a legally enforceable debt?
CAclubindia
