Wednesday, June 15, 2016

Cheque-bounce case outside winding-up

The Bombay High Court has ruled that a company and its directors can be prosecuted for issuing a cheque which gets dishonored by a bank even if the company is facing winding up proceedings under the Companies Act 1956. It is not necessary to get the assent of the company judge to prosecute the accused persons under Section 138 of the Negotiable Instruments Act which deals with bounced cheques as a criminal offence.

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