Questions & Answers
Who is responsible for the company bounced cheques if the signatory leaves?
Hello Madam,
My question is on a company cheque issued by the previous signatory (last 3 years new signatory, the previous signatory is absconding, not now in license).
If this cheque is returned, is it the responsibility of the new signatory or the company?
Dear Questioner,
If a cheque is dishonoured, its liability is on the signatory of the cheque. If the cheque is signed by the manager of a company who knowingly signed a cheque which is unlikely to be honoured, has committed an offence which may result in a penal action against him personally.
The shareholders will have a civil liability on the amount to the extent of its shares.
In your case, if you are in process of recovering the cheque amount, you may file a civil case against the company and a criminal complaint against the signatory of the cheque.
Hope my answer is clear to you. Please feel free to contact me if you need any further clarification.
Thank you.
Regards,
Rajasree Ravivarma
