ANIL KUMAR KAUSHIK (LLB) 04 March 2023

complaint against firm u/s 138 N.I.Act

Sir,
In one of the 138 N.I. Act there are three accused , firm and two authorized signatories, If signatories are fail to do payment of the disputed cheque , can firm be liable for payment or we should file a further suit of recovery within the time of limitation.
Anil Kumar Kaushik Advocate

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Quick Summary

This discussion addresses liability in a Section 138 NI Act case involving a firm and two authorised signatories. The key question is whether the firm remains liable for payment if the signatories fail to pay the disputed cheque amount. The response clarifies that under Section 141 of the Negotiable Instruments Act, the firm is represented by its directors or partners and must be prosecuted if the cheque was issued from the firm's account. The signatory of the cheque is typically the one liable for prosecution.

2 Replies

NARENDER sharma 05 March 2023

After the complete of 3 months, if the check is deposited in the bank, If you have any judgment on this then tell me..

Dr J C Vashista (Advocate) 05 March 2023

@ Mr. Anil Kumar Kaushik

U/s 141 of the Negotiable Instruments Act, 1881 the firm is a fictitious entity, which is represented through its partner(s) / director(s) / official(s), which has to be impleaded / prosecuted as a party when the dishonoured cheque has been issued from the account maintained in the name of the firm.

Consequently signitory of subject cheque shall be the person liable to be prosecuted but not both of the authorised signitories.