My mother was a honorary director in small firm started by my relatives. About a year ago she had signed on a blank cheque with no date on them. This cheque was given as surety to Mr A from whom the firm had borrowed some money. Mr A has in turn given this cheque as a payment to Mr B for some transaction not related to the firm.
It appears Mr B has submitted this cheque recently which bounced due to lack of funds and now he has issues summons to my mother as she was the signatory on the cheque. I am trying to find out about the date of cheque of submission and all those things to see. But in the meantime, I'd appreciate any help on how to go about this case.
Also, my mother was only a honorary director and she has not taken any payments for the role and she hasn't had any role in the running of the firm. Will that make any difference to this case?
The summons have been sent by a court which I supposed is based on a complaint registered by Mr B. I haven't seen the summons as yet as it was sent to the firm's address and we haven't yet accepted it.
To my knowledge, she has not explicitly resigned from the firm but, the firm itself has been dissolved now. Just to add a little more background (if it helps) when the firm was started , my mother was told, she will be the one of 3 directors with 2 other cousins and she will be signing authority along with the Managing Director (who is my uncle). I believe the summons have been issued to both my mother and my uncle as the cheque has their signatures on it.
The main object of the section 138 of Negatiable Instrument act 1881 is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments.HERE IT SHOWS THAT THERE IS LEGALLY ENFORCEBLE DEBT TO 'A',THERE AFTER IT WAS GIVEN TO 'B' SINCE IT IS A NEGOTIABLE INSTRUMENT.(THE HOLDER IN DUE COURSE).
IN MY OPINION THE OFFENCE U/S 138 ATTRACTS TO YOUR MOTHER .