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One director at fault will all the directors be dragged to court
18-Sep-2023 (In Cheque Bounce Law)
Is there a law where all the directors of a company can not be dragged into a court when only one director is at fault? Which section? One director of a company dealing with a vendor bounced a cheque. He released the PO, signed the cheque without knowledge of other director. Can other directors be held responsible for the same?
Dear Client,
All directors can not be dragged in court for fault of others, there are Manny judgements passed by the High Court and Supreme court as these issues were arising recently,
case can be filed against the Directors, who were looking after day to day activities of the Company and those who have signed the cheque thereof.
if this is regarding cheque bounce case then please see Section 141 of Negotiable Instrument Act
Regards
Adv. Sudhir Parshe
All directors can not be dragged in court for fault of others, there are Manny judgements passed by the High Court and Supreme court as these issues were arising recently,
case can be filed against the Directors, who were looking after day to day activities of the Company and those who have signed the cheque thereof.
if this is regarding cheque bounce case then please see Section 141 of Negotiable Instrument Act
Regards
Adv. Sudhir Parshe
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Adv. S. J Parshe
Pune | 25+ Answers
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Hello, normally all directors get prosecuted u/ s 141 of NI Act. But if you are the signatory of the cheque then you must challenge the order of issue process before sessions and district court of said jurisdiction. There are landmark judgments which state no other directors can be prosecuted in such cases.
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Adv. Sagar Kothari
Pune | 400+ Answers
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