A MD of a company took unsecured loan via RTGS in company name. He gave a post dated cheque of company for guarantee. Then after one year he sold the company to another person who became new director of co., And old director retires. Old director entered upon a notorized agreement with new director in which all old liabilities of company were to be paid by the outgoing director. After this he leaves town and his is not traceable. The person who gave loan presents the cheque of old director signature which returns due to signature difference. He files a court case of section 138 for cheque bounce and makes new director as accused. Can the court now hold the new director responsible for this cheque bounce? How can the new director defend in this case?
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1. Yes new director will be liable to pay the amount filled in the cheque by creditor. As the cheque was issued under the capacity of director of firm.
2. New director can present the case as loan was taken for personal use by previous director but cheque was issued as director of firm.
3. New director should go for compromise with creditor and clear the loan so that creditors withdraw the case.
1) cheque is issued by old director
2) in event of dishonour of cheque the company and old director would be liable
3) new director defence should be that he has not signed cheque and is not liable for dishonour of cheque as he was not in charge of day to day management when cheque was issued
The new director has to defend the company's interests at any cost.
He would be held liable for the company's debts.
He may have to repay the debt and can arrange to recover from the previous MD as per law subsequently.
You need to contest the case. You need to go for quashing of complaint to HC or go for challenging process at sessions court
Director who is responsible for the affair of company at the time of cheque issue is only responsible.
File quash petition in court.
1. The new director's liability starts from day he takes over Co. alongwith assets & liabilities. In this case old director is liable for old liabilities due to the notarized agreement for old debts.
2. Here the new director has to prove that cheque was not issued by him, not signed by him and he has no knowledge of any pending cheques signed by old directors.
3. N.I.Act is enforceable on those persons who were "in-charge" of office at the relevant time the liability was created. It is a matter of proving in court and court will have to absolve the new director, because of various above reasons.
if cheque issued by old director then new director is not liable. new director may file quash petition in high court.
