negotiable instruments act - liability of proprietor

Uday Kumar (Querist) 15 August 2021 This query is : Resolved
Dear Sir,

1. A due amount is required to be paid by the Proprietor of the Company
2. Other then Proprietor has issued cheque from his personal Account and even given in writing that I shall pay the said due amount of Proprietor of the Company
3. We made Proprietor and Other Person who issue the cheque party in a Complaint.
4. Now Court say we can issue the summon to Other party who issued the cheque but not the proprietor .... Court asked us to give any judgment in this regards..

Can expert help me with suitable judgment please if case is understood clearly.

Thanks
U Kumar

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Quick Summary

This discussion explores the liability of a company proprietor under the Negotiable Instruments Act when a cheque is issued from a third party's personal account. The court ruled that only the signatory of the cheque can be summoned, not the proprietor, unless the proprietor is also the signatory. The third party who issued the cheque, having personally guaranteed the debt, can be prosecuted.

Dr J C Vashista (Expert) 16 August 2021
It is the signatory of the cheque who can be summoned.

Whereas, the signatory, being an "Outsider" and has no legally enforceable debt, can not be prosecuted and punished under the provisions of section 138 of the Negotiable Instruments Act, 1881

Advocate Bhartesh goyal (Expert) 16 August 2021
Complaint against proprietor is not maintainable as he is not signatory of cheque.
Other person who is signatory of cheque may be prosecuted as he has taken the responsibility to repay the debt and liability of proprietor firm and issued cheque as guarantor.

SHIRISH PAWAR, 7738990900 (Expert) 16 August 2021
Hello,

You mentioned in the query that 'other' person has issued a cheque and also issued a letter stating he will pay the amount. Therefore court is right that issuing summons to 'other' person.

P. Venu (Expert) 16 August 2021
Who is this 'other' person?

G. ARAVINTHAN (Expert) 25 January 2022
Who is the other person issued cheque on behalf of proprietory of company?

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