Professional fee returned by C.A. to client is a Debt?
pravin jain
(Querist) 15 September 2009
This query is : Resolved
A private limited company has paid professional fee to chartered accountant for setting up a project of Bio -Diesel and cultivation of Jetropha plantation . cheque in the name of Chartered accountants firm's issued for project report preparation fee. Another cheque issued to cultivate the nursery for plantation in favor of his HUF the karta of HUF is proprietor of Chartered Accountant's firm.( karta and Chartered Accountants are same)
After preparation of project report and raising of nursery for saplings due to some disputes , the karta of HUF has issued the cheque for entire amount to the company. The cheques returned and Director of the company has filled the suite under sec. 138 of N.I. Act.
Now question arises that whether the karta of HUF shall be liable for fees received by Chartered Accountants firm ?
Whether fees received by HUF returned to the company is a Debt or Legally enforceable debt ?
Whether cheque issued to return the fees is for consideration?
The karta of HUF has made an application under sec. 91 of Cr. p.c. for production of agreement , MOU, books of accounts, vouchers, other relavant records in support of transaction. The Company denies to produce any thing. And through its director furnished an affidavit that the company has no records, vouchers nor account books in his possession on nor in control and can not produce. The case is at evidence stage steel evidence has not started.
On the basis of above facts can a discharge petition be filed by HUF?
Or Director of company can refuse to produce the documents which the company is legaly liable to maintain under section 209 of Companies Act 1956.
PLEASE COMMENT ON THE PROBLEMriven
Raj Kumar Makkad
(Expert) 15 September 2009
Instead of filing specific discharge petition it is better to contest the complaint filed by company. It is the liability of the complainant company to prove that the cheque was issued in discharge of the liability and further that this liability arose due to such and such transaction...as per facts stated by you, the complainant company has refused having any document/voucher showing the liability of Karta of HUF hence in my opinion, nothing to worry and complaint is liable to be dismissed in the light of facts and law on the subject.riven
PARTHA P BORBORA
(Expert) 16 September 2009
Raj Kumar makkad is right but in a case under Section 138 NI Act burden lies on the accused to prove that he has not issued the cheques against any legally enforceable debt.
As the project was not completed the KORTA has no right to claim the consideration, that is why he returned the amount through cheque and as the cheque was bounced the KORTA shall be held liable under Section 138NIAct.
Moreover the cheque was issued by the KORTA, if there is no legally enforceable debt why he issued the cheque? so. burden lies on the KORTA.
riven
