Alok Vashishth (Sr. Manager) 15 April 2011

Director's liability in bounced cheque

Hi,
I would like to know to what extent a director/ shareholder of a pvt ltd company is liable for the bounched cheque (company cheque) on which he is one of the authorized signatories.

Also, will bounced cheques be treated as 'bounced' for frozen bank accounts. Frozen on the complaint of my client due to the fund mis-management and forgery of signature of my client by other director.

Thanks in advance

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2 Replies

adv. rajeev ( rajoo ) (practicing advocate) 15 April 2011

Director is liable for an offence u/s 138 of NI Act, but in the complaint there must be specific averment in respect of the directors. IF itz forzen account then you have to contest the case./

Alok Vashishth (Sr. Manager) 20 April 2011

In the bounced cheque, company and all the signatories will be parties. Then, what will be the liability of the authorized signatories for a cheque, say of amount Rs. 1 lacs if the authorized signatories is just 3% shareholder in the company.