Tuesday, March 15, 2011

DIRECTOR OF FIRM NOT BE DRAGGED TO COURT UNDER SEC 138, IF NOT DIRECTLY RESPONSIBLE

The Supreme Court (SC) stated that the director of the company not be dragged to the criminal court when documents prove he was not responsible for issuing cheques which were dishonored. The Calcutta high court had asked a former director of Rifa healthcare (India) who had resigned from the company to stand trial for the issurance of 18 cheques. He showed from documents he had left the company & therefore the case against him should not be quashed. But the high court insisted it was his duty to show the trial court he indeed quit the company. Therefore he should face the trial first. He
appeal to Supreme Court (SC) against the order. The Supreme Court (SC) set aside the ruling in the case Harshendra kumar vs. Rebatilata Kole, stating that it was evident from the records of the company and the registrar of the companies he had left the firm at the time of issuing the cheques.

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