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Negotiable Instrument Act section 138

(Querist) 22 April 2011 This query is : Resolved 
Dear Sirs
I have been doing a partnership business with two more partners. The account operation of bank is to be done any two partners. It was a trend that one partner going out of station signed the cheques and give to another for making necessary payments for smooth running of business. In this trend, I also give some cheques to my partners after signing but they misuse the same after some dispute, by filling the name of their close aids and file the court cases u/s 138, they are also party with me but their advocate is different from mine. I don't know the beneficiary of those cheques never done a business dealing and they can not prove the liability towards those cheques. What is the remedy for me?
M/s. Y-not legal services (Expert) 22 April 2011
Under n.i act if any cheque is bounced mean, you should be issued that subject cheque for disclose your credit amount.. Unless you didn't commit any offence under n.i act..
M/s. Y-not legal services (Expert) 22 April 2011
The burden of proof is not your's.. You just face your case before court of law.. Nothing to worry here..
R.Ramachandran (Expert) 22 April 2011
How do you say that you do not know who the beneficiary of the cheques are? You might have received a legal notice when the cheque got bounced. There every particulars would be there.
Have you engaged a lawyer or not?
You have to defend your case by saying the arrangement i.e. you sign and leave the cheques with other partners for discharging any liability, and that there was no dealings with or liability towards the payee of the cheque. That there was fraud committed by your partner etc. etc.
In any case, you may have to file a case of criminal breach of trust against the other partner(s) who has/have misused the cheque.
Naresh Kudal (Expert) 22 April 2011
I completely agree with Expert Ramchandran.
Ajay Parashar (Querist) 22 April 2011
Dear Sirs,
I want to submit here that I came to know from the notices of advocate about the beneficiaries of cheques. I was mean to say that I don't know these persons before this and they have never done any business dealing with me or my firm before this. Please advise under which section I can file a case of criminal breach of trust against the partners who misused the cheques. Can I terminate them from partnership on that basis. Please advise.
Ajay Parashar (Querist) 22 April 2011
I want to add here that I dont't know the beneficiaries of the cheques before the notices,who belong to another state (Haryana) and the factory is located in Punjab who is surronded by legal barriers. All the goods transactions are made at barriers and their is no record available at these barriers prior to presentation of these cheques.
Guest (Expert) 23 April 2011
Try to check if your partners have received any goods or services from the beneficiary in the name of the firm and would have disposed off privately in your absence and without your knowledge. You may also try to verify if the beneficiary has any relationship with any of your partners.
DEFENSE ADVOCATE.-firmaction@g (Expert) 23 April 2011
This is a vicarious liability.
RAJU O.F., (Expert) 23 April 2011
Since, the cheque had to be signed by two partners, asx joint operation of the partnership business, you alone is not liable; liability is equal for the other partner who had signed the cheque and later misused it. As your relation among the partners is strained, better sort out with all the partners.
Advocate. Arunagiri (Expert) 23 April 2011
There is no other go, you have to face the trial and take the defense.

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