Cheque bouncing 138 n i act

finpro consultants (Querist) 10 April 2018 This query is : Resolved
Hello, If a cheque signed by authorised signatory of a Properietory Concern is returned unpaid, Is it necessary to make the authorised signatory accused or only the Proprietor of the Proprietory Concern can be made accused. Is the case maintainable if authorised signatory is not made accused in the complaint.

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SHIRISH PAWAR, 7738990900 (Expert) 10 April 2018
As per me one has to make signatory of cheque accused to the complaint u/s. 138 of NI Act.

Ms.Usha Kapoor (Expert) 11 April 2018
Authorized signatory should be made accused in the checque u/'s 138 NI Act.

Guest (Expert) 11 April 2018
Cheque was issued for the payment of which goods or services and supplied to whom?

P. Venu (Expert) 11 April 2018
Why 'if' - what is the real issue?

finpro consultants (Querist) 11 April 2018
Real issue is that repayment cheque is signed by the authorised signatory of Proprietory Concern instead of the proprietor himself. The signatory is not made accuses. Few case laws referred states that authorised signatory of proprietory concern can not b made accused and only properietor is liable. Authorised signatory will b liable when cheque is issued by Firm or a company or LLP and not proprietary concern. I am confused.

Guest (Expert) 11 April 2018
You have still avoided reply to my question, payment by cheque relates to what goods or service and supplied to whom? Real issue can never be the signature on the cheque but the issue pertaining to the reason and purpose for issue of the cheque, which are avoiding to mention.

If you have posted your query just to test the knowledge of the experts, you can make judgment of those two experts, who jumped to the conclusion on hit and trial method, without knowing the case history.

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finpro consultants (Querist) 11 April 2018
The cheque is issued towards payment of Bills Of Exchange accepted by Proprietary concern on its due date.
I had discounted this BoE as an individual investor. The repayment chq returned unpaid. Case u/s 138 filed only aginst proprietor. Now I am in dilemma whether I should make an application to join signatory as accused. My purpose of putting query is to get guidance on who all should b made accused in the matter. Only proprietor or signatory to chq and proprietor both.

Guest (Expert) 12 April 2018
Discounting of the Bill of Exchange does not fall within the scope of goods or service for which payment would have become due to you. It is simply a mutual arrangement of supply of funds for short term period pending clearance of the bill dues. So, the liability of payment against the Bill of Exchange solely depend upon the acceptance of the BoE under the sections pertaining to BoE, not under section 138, which you have not made clear. However, if the payment of the bill has been received on your behalf by the other party and the cheque is dishonoured after that liability of the acceptor of the BoE can be established.