Sec. 138 nia query
P.C. Joshi
(Querist) 18 September 2013
This query is : Resolved
I shall be grateful for the comments of learned members on following query:
Company A deals in FMCG goods and for distribution the Company appoints Consignee Agent in all states, the Consignee Agent sells goods to wholesale distributors and whole sellers and then the goods are sold by them to retail stores.
In all cases there is an agreement between the Company and Consignee Agents (CAs). The distributors are appointed by the company jointly with CAs. One of the Consignee Agent has defaulted in payment and contended that the payment is due from a distributor say X. The Company discontinued the business with CA and at the time of settlement of account, the CA handed over a cheque issued by distributor X in favour of the Company directly. However, on presentation, the cheque given by the distributor(X) got bounced.
Can the Company file a complaint against distributor(X) under Section 138 of the Negotiable Instrument Act?
Please let me have your comments.
ajay sethi
(Expert) 18 September 2013
commercial query . company can afford legal fees
P.C. Joshi
(Querist) 18 September 2013
Dear Mr Sethi,while I appreciate your feedback but sir,I am from lawyer faternity and this forum is regarding sharing of knowledge.I personally feel that in the subject query, in the absence of any direct dealing between the company and the distributor, the company can not prove that the amount is due against legally enforceable debt. hence, the complaint will not be maintainable under sec. 138 against the distributor. It is just about sharing of knowledge. if you feel it's ok please let me have your comments.
Thanks
V R SHROFF
(Expert) 18 September 2013
Q: Can the Company file a complaint against distributor(X) under Section 138 of the Negotiable Instrument Act?
Ans: y shd u doubt?? being from lawyer faternity ..
