Legal Question in Criminal Law in India

Negotiable instruments act
In one of our case we have filed case against one company in which one of the director was authorised signatory. Now that director has resigned. now another director is coming to the court to defend but he is saying that he is not concerned about the transaction before the court and saying further that the winding up procedure is going on as co. has gone into liquidation and liquidator is also appointed. As per N.I. act every person involved in the affairs of the co. is liable but co has gone into liquidation then what is the remedy available? how can we recover our money?

Asked on 5/15/07, 11:36 am

5 Answers from Attorneys

Vivek Mapara Mapara Law Firm

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Re: Negotiable instruments act

The law of negotiable instrument is that the person incharge of the company on the date of commital of offence is liable for prosecution, now if he subsequently resigns then also he is accountable for the offence under NI Act. Amount can be recovered from him personally.

Answered on 5/15/07, 12:59 pm

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Re: Negotiable instruments act

Even if he had resigned even then his criminal liability is not waived.Proceed with your case against the director.

Answered on 5/15/07, 1:19 pm

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Vishwa Arya Arya & Co.

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Re: Negotiable instruments act

Dear Gentleman:

The complaint you have filed is for punishment to the accused who were responsible for the affairs of the company. The mere fact that he resigned is not going to absolve him of the liability. Winding up of company is also not going to affect the fate of your complaint which is criminal in nature and not civil. Just carry on with your complaint. Law is with you.

Answered on 5/15/07, 1:28 pm

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Shrichand Nahar S.V.Nahar, Advocate

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Re: Negotiable instruments act

It is not clear from your question as to whether in the case filed by you, both the company and its director who signed the cheque are accused. If both are accused, then resignation or retirement would not make any difference vis-a-vis the offence. You should also be clear that a prosecution under section 138 NI is for punishing the offenders and not for recovery of your money.

Answered on 5/19/07, 3:50 am

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