Sanjaycase (service) 14 March 2013

Check bounce and missuse of poa

I have a case where a small company had cheated me, the checks bounced back and I have a solid case for 138 and 420.

In discussions with the company directors (A and B for reference), I learnt that A is very poor and not much educated person while B is the master mind behind the act. The company is registered by B on the name of A as director and B has taken full power of attorney from A.

Some checks which are bounced are signed by A and some by B.

When I came to know about these details I feel sorry for A. Off-course I want to recover my money, but I know A is not in position to pay the amount. Also I really want to punish B, for this fraudulent act in a legal way primarily then A as B has used this poor chap.

Because of my limited understanding I am asking this basic question.

In such situation when B has full power of attorney, and signed check of high value which bounced and signed agreements where the obligations are not met etc can B escape using power of attorney putting A behind the bars ?

In short using full power of attorney can B make a fraud and escape as he is acting for A.

Thanks in advance for your help with inputs.

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6 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 14 March 2013

If the Cheque issued by or on-behalf of the Company is dishonored, then, the persons in-charge of and responsible to the affairs of the Company can also be booked for an offence under section 138 of N.I.Act.

Rahul Kapoor (Legal Enthusiast) 15 March 2013

hello,

have you got any notice from the bank ?

regards-

rahul.gogreen@gmail.com

Sanjaycase (service) 15 March 2013

Thanks Rama,

So if I understand your inputs, If A has given full power of Attorney to B and B had signed the check which bounced, I can book B under the 138 offence along with A. Is that correct understanding. I am checking because A does not have any money to negotiate and B will negotiate only if he is likely to get punished.

Thanks,

Sandeep

MARU ADVOCATE (simple solutions for criminal legal problems -- yourpunch@gmail.com) 15 March 2013

Law gives very vide meaning to constructive and vicaraious liablity that all persons who have assisted are liable.

But to persue such actions is lengthy and expansive.

R Trivedi (advocate.dma@gmail.com) 15 March 2013

You mention "company" and "directors", but it is not clear who all are directors.

If it is a Private Limited company then it will have more than one director, find out if B is a director.

If it is a Partnership firm then also it will have more than one partner, find out if B is a partner.

If it is a prop firm in the name of A, and B has taken GPA from A, then it is somwhat tricky.

If B is a Director or partner as the case may be, then he can certainly be prosecuted along with the company/firm.

Sanjaycase (service) 18 March 2013

It is prop firm in name of A and A has given full POA to B. That is what B is presenting in court. But interestingly I have notarized investment document in which B is referenced as propriter and I have some checks whcih B has signed as prop not sure if he did that by mistake.

In such case can I trap B who has all the money