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vijay   26 December 2020

Firm cheque misuse

Hi!

The Retired Managing Partner had misused the Firm Cheques for his Personal Loan of 20 lakhs from some Third Party while he was also one of the Managing Partner of the firm. Which we are completely unaware of it & also it was clearly mentioned in the Deed that Two of the Managing Partners are authorized to operate Bank Accounts Jointly But Not Severally Nor Individually. Which means  both the Managing Partners Should Sign the Cheque inorder to Pass.

Recently, we received a Legal Notice from that Third Party to Repay the Loan stating that Amount of 20 Lakhs was taken by the retired partner Long before for which he gave written statement signed by himself on Company Letterhead(While he was Not Retired) & as a part payment of 9 Lakhs he issued Firm Cheque(After his retirement) But the cheque couldn't pass saying drawer signature as not per mandatory & failing to pay in 15 days will lead to NI act 138. Is the Firm or other members of the Firm responsible for the acts of retired partner? He only Signed the Cheque after his Retirement. What should we do immediately. Please suggest. Thank You!



Learning

 11 Replies

Bunty   26 December 2020

Give reply in detail of the notice. File quashing petition, it might be helpful otherwise you have to face trial.
2 Like

vijay   26 December 2020

Yes we already sent reply notice to the them. So, You mean to say that only the Retired Partner is liable & Punishable But not Other Partners of the firm? We are very much concerned because he gave our Firm Cheque & acknowledgement of Receiving Amount from that Third partyon the firm letterhead.


Apart from that what kind of legal action we need to take against him for misusing the firm Cheque? Thank You!

 

 

Isaac Gabriel (Advocate)     26 December 2020

Issue notice to him for his mideamenor and to set right thins. Else file criminal complaint in court of law in the name of the firm.

1 Like

vijay   27 December 2020

Ok sir. Also we would like to know who is responsible for the loan amount he took on firm cheque? Do other members of the firm are also Liable to clear his Loan? Please suggest. Thank You!

Isaac Gabriel (Advocate)     27 December 2020

You say it is a fraudulent act without knowledge of othr partners.If you have any.doubts, consilt lawyer to proceed against.

1 Like

P. Venu (Advocate)     27 December 2020

The facts are too complex to be opined in an online platform. The matter requires professional consultation.

1 Like

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     27 December 2020

  1. First point is that the cheque was not bounced for want of funds.
  2. Second, it is not issued by the firm (even fraudulently and unauthorisedly) for any consideration it received.  One of the Managing Directors issued it for consideration of his personal loan. His act is fraudulent.
  3. The partnership firm has not availed any loan from the Third Party who issued the notice and therefore has no cause of action against the firm.
  4. As per the Partnership Act, the Partners are liable jointly and severally for the debts of the Partnership firm. Partnership firm or its partners are in no way liable for any of their personal loans of any of the Partner/s.

Therefore, you may cause a proper reply issued through a competent and reliable Lawyer denying any liability and explaining the position of the Partnership firm.

2 Like

Dr J C Vashista (Advocate)     28 December 2020

You have no option but to contest / defend your case with facts and figures, if drawee of the cheque files a complaint case.

It is better to consult and engage a local prudent lawyer for better appreciation of facts/ documents, professional advise and necessary proceeding.

vijay   28 December 2020

1) Partnership firm with 5 members & Its a Registered Firm. Only 2 are authorized to operate Everything & accounts jointly which is Clearly mentioned in the Partnership deed itself. One of them is Retired while he was One of the Managing Partner of the Firm.

2) Retired Misused the Cheque after his Retirement. He is neither entitled to operate cheque or any other document related to Firm solely Even Before his Retirement.

 

So, Why other 4 Partner of the Firm has to face the trail?  while it is Clearly mentioned in the deed that Every documents related to firm Must be Jointly Operated by the Managing Partners Only? Bcoz Out of the 4 remaining partners two of them are ladies & all the four partners had no clue about his misuse of cheque. We mentioned the same thing in the Reply notice as well & Moreover he issued the Cheque Only Signed by himself which is Clearly after his Retirement date from the Firm.

 

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     28 December 2020

Since notice is received in the name of the Partnership firm, you need to respond and cannot ignore it. No point in arguing with the members of the forum who clarify and advise.

1 Like

vijay   28 December 2020

Thank you Everyone for your valuable suggestions. Just one clarification needed.  Apart from everyone in the firm facing the trail & if proved Guilty, who is liable to pay the amount? Is it the person who did it or entire Partners of the firm? Please suggest. Thank You!


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