Liability for dishonour of cheque

Shyam Lal Naik (Querist) 22 March 2010 This query is : Resolved
Dear Experts,

Please opine wrt sec. 138 of the NI Act.

A cheque was issued without any date. There was no dispute about the liability. How ever, the cheque was disnonoured on account of stop payment instruction from the drawer. The cheque was drawn in the capacity of a partner on behalf of partnership firm.

In the above circumstances, what are the civil and criminal liability of the signing partner/ other partners/ firm.

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adv. rajeev ( rajoo ) (Expert) 22 March 2010
All the partners will be held responsible for committing an offence u/s 138 of NI Act.But there is one positive point for you i.e., without date.
Please refer 2004(1) Bankman 247(A.P) Andhra Pradesh High Court judgement.
Gist: Blank cheque-material alteration-cheque in issue drawn and handed over to the complainant without specifying the date and amount-subsequently, complaint without the consent of drawer, filled up the amount portion in figures and words and also put date of his choice-Dishonour of cheque on presentation -whether the said dishonor falls under section 138 of NI Act?- (no)
It may help you.

Parveen Kr. Aggarwal (Expert) 22 March 2010
As there is no dispute about existence of liability, the cheque shall be deemed to have been issued in discharge of that liablity by virtue of provision contained in section 139 of the Negotiable Instruments Act, 1881.

As per section 141 of the Negotiable Instruments Act, 1881 the signatory of the cheque as well as other parters of the firm as also the firm, are liable for commission of the offence.

You may also file a suit for recovery either under Order 37 of the Code of Civil Procedure, 1908 or a simple suit for recovery against the firm and its partners.