Legal Question in Criminal Law in India

Negotiable Instruments Act. Director Resigned

I was a director in a company which issued a cheque (and was one of the signatories of the cheque). But due to a misunderstanding with the board I resigned. For some reason, the complainant presented the cheques 6 months after i resigned. The cheques bounced because the accounts were closed by the existing board of directors.

I agree that it is an offense under sec 138 and the complainant should get his money. But am I liable for this as i was not incharge of the affairs of the company when the offense was committed since i had resigned 6 months prior to the cheques being presented.


Asked on 9/06/08, 1:10 am

5 Answers from Attorneys
Aniruddha Pawse Aniruddha.P.Pawse Advocates

Re: Negotiable Instruments Act. Director Resigned

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Answered on 9/10/08, 7:49 am
Vijay Chandavale Advocate Vijay Chandavale & Associates

Re: Negotiable Instruments Act. Director Resigned

in my opinion u r required to undergo prosecution because as on date of issuance of cheque u were responsible and u can't take a stand of resignation as the same is subsequent

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Answered on 9/07/08, 1:23 am
Shrichand Nahar S.V.Nahar, Advocate

Re: Negotiable Instruments Act. Director Resigned

What is the query?

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Answered on 9/07/08, 3:46 am
Deepak kumar

Re: Negotiable Instruments Act. Director Resigned

It is definetly an offence under NI Act but, the liablity for the same vests with the person incharge ie the officer in charge. In any case, u do not deny that you are a signatory to the said cheque. But, the most important thing is that you can easily come out of this liability(if a criminal case is instiuted against you)by filing a petition under sec482 of the Cr.P.C in the High Court and request for the quashing of the proceedings under sec138 of the NI Act.There are a number of cases being quashed by the High Court in exactly similar matters.

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Answered on 9/06/08, 6:37 am
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: Negotiable Instruments Act. Director Resigned

You are liable being one of the Signatory on the cheque. Your resignation will not absolve you from the liabilities incurred by you while you were in office.

Finally, you may be acquitted on the basis of evidence you may produce in court; Or, if any liability is fastened upon you, you may recover the same from the Company on the basis of your previous resgination.

Better you settle the matter with the payee of the cheque and raise your claim against the company.

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Answered on 9/06/08, 7:06 am


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