Legal Question in Banking Law in India
In case of a company, an employee of the company acting as authorised signatory of the company signs a post dated cheque, which at later stage bounces back. Can that employee be punishable under Sec.138 of Negotiable Instruments Act? If he is not punishable, then how can the section be invoked on the company for imprisonment.
If he is punishable, what is the amount of punishment and grounds of punishment, when he is mere representative of a separate legal person.
Please share your advice.
3 Answers from Attorneys
the employee of the company cannot be held responsible personally for the case as he is merely an authorized signatory. it is the directors of the company who are liable to arrange the funds and they may be prosecuted.
the case will be against the company and not against employee so the owners/directors can be prosecuted.
A complaint should be filed against the company as also its authorized signatory.
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