Legal Question in Business Law in India

ex director charged for fraud

I had given resignation as the director of the company in writing with immediate effect to my company M.D. in the year 1998. The case under section 138, Negotiable Instrument Act was filed against the same company somewhere around in 1999. In these case the complainant had added my name as an accused with one another person who had taken the charge as the director on my place along with M.D. and two other persons. The cause of action has not taken place during the tenure of my office of my working as a director.

Please guide me as to the line of defence and provide me the latest citations and authorities of Supreme Court and High Courts related to my matter.

Thanking you,

--name removed--


Asked on 12/02/02, 4:04 am

2 Answers from Attorneys
dr Vedula Gopinath Gopinath Corporate Lawyer

Re: ex director charged for fraud

am a corporate lawyer fm India presently camping in usa.

this is a cheque bouncing case. as per the complaint the criminal court immediately gives the summons. If you have singed the cheque on behalf of the company all the directors are liable and the summons have got to be served on all the directors. However, you have certain safeguards as per decided cases. I donot have precednets right now with me. Are u from Chennai. Please give me full details of the case and your address. and telephone number gpinath 001-509-736-1173

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Answered on 12/02/02, 5:54 pm
Shrichand Nahar S.V.Nahar, Advocate

Re: ex director charged for fraud

You have not specified whether your resignation was given effect in the records of ROC (the Registrar of Companies) by submitting Form No.32 and if such a effect was given, on which date. Much may depend on that as the Complainant in the case on hand might have searched the records of ROC and found out your name as one of the Directors. My further reply is on presumtion that necessary ROC compliances have been made in time.

The trial for offence u/s.138 Negotiable Instruments Act is governed by procedure of Summons Trial. You may apply to the Court for recall of process on the ground of not being a Director in the relevant period. As per the law laid by the Apex Court in K.M.Mathew's case, process issued to an accused in a summons trial can be recalled.

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Answered on 12/03/02, 1:09 am


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