Section 138 of the Negotiable instruments Act
I am Shashank, speaking from Bangalore. I had incorporated a company on March 4th with my co founder Syed. Both of us are directors of the company.
After a couple of months, he decided to leave the company in pursuit of MS. He gave me his resignation from the board (I haven't processed it as I have been in Hyderabad since then. I told him I'd pay him his share of (incorporation costs + broker charges = 12,000) (we used a broker to find a office) and he'd resign and let me bring my friend on the board. So, I gave him a post dated cheque.
But I decided to not pursue the business anymore and settled on a fellowship programme at IIT. So when the time came, I stopped the cheque. Technically he is still a director.
Now he has sent a notice under Section 138 of the Negotiable instruments Act that I am liable for 12,000. Kindly advise.
Asked 7 years ago in Civil Law
Yes I realise that. But my question is, how will this be considered as legally enforceable debt or liability? It was an offer from my side to give him is cost of incorporation (As co founder he should bear the cost too) in return for me taking control of the company. But I have not pursued the business and he is still director and part of the company. Why should I pay him? If he decides to leave, shouldn't he bear the cost of the loss?
Asked 7 years ago