First and foremost thing to be understood is what was the transaction for which the cheque was issued by you. At his stage lets for get that the second director has not signed the said cheque.
If the said transaction for which the cheque was issued was not complied and fulfilled, there are judgments to that effect which say that cheque issued towards a contractual liability not completed by the drawee and in the circumstance of cheque being dishonored, does not attract 138 N I Act.
As you stated that you stopped the cheque, in such event first thing to be noted is that when you are stopping the payment of cheque the communication of the same is to be made to the drawee not to present the cheque in advance and simultaenously to your banker. It is as well necessary to be noted that when you are giving instructions to stop payment of the cheque issued the person issuing the cheque should have the amount for which cheque was issued in his account so as not to attract the provision of 138 N I Act.
As regards the liability of the director who has not signed the cheque, the said director cannot be held responsible for any legal enforciable liability.
As regards the subsequent part where you have stated that the said person has put a story that you borrowed some money and paid back a particular amount and for the remaining balance you issued cheque of your company. That, the person/complainant having gone to say that the amount was borrowed, now this issue can be looked at the time of cross examination.
At the time of cross examination you can take a defense and examine him on the issue of his bank account details, where from he got the money. Further you can ask him, if any agreement of hand loan was executed to that effect betwene you and the said person. You can ask him if not, in such event, has he produced any document showing that he paid an amount of rs.2,00,000/- to you, if not, has he informed the income tac authority about the hand loan and does the same reflect in his Income tax returns. You can ask him, whether he has filed any document to establish that on the date alleged when he gave you an amount of rs.2,00,000/-, he had that much balance in his account. If he got the said amount from any profits by sale of property, can he produce any relevant document to that effect.
The purpose of asking all these questions in cross examination is as Supreme Court delivered Judgments on the point saying unaccounted money: cheques issued: doesnot amount to dishonour of cheque and provisions of section 138 N I Act is not attracted.
Theres no point to panic about. 138 N I Act is specially a bailable offence. if you couldnt appear subsequent to acceptance of the summons, the court will issue bailable warrant and even if subsequent to the receipt of the same if you dont appear before the court, the court will issue non-bailable warrants. You can at any time in between before issuance of N B W, appear before the court, prefer application for taking case on board and along with the same prefer application for cancellation of bailable/ nbw and prefer application for releasing you on bail/ cash security.
