If a company's cheque bounces, not only the company but also the people in charge (like managers or directors) can be held responsible. They can be punished too. However, if they can prove they didn't know about the bounced cheque or tried to prevent it, they might not be punished.
A company, 'XYZ Ltd.', issues a cheque that bounces. The managing director and the finance manager of XYZ Ltd. can also be held liable, along with the company, if they were in charge of the company's finances.
- •If you are a director or manager, you can be held liable if a company's cheque bounces.
- •You can avoid liability if you prove you didn't know about the offence or took steps to prevent it.
- •The company itself is also liable for the bounced cheque.
📒 Legal text sourced from The Gazette of India & AdvocateKhoj Bare Acts Library
⚖️ Content reviewed by Advocate Aditi Babbar, with 3 years of legal practice
📚 Act Reference: Negotiable Instruments Act
Disclaimer: This content is for informational purposes only and does not constitute legal advice. Consult a qualified advocate for specific legal matters.