Firm's ex-boss not liable if post-dated cheque bounces: SC

Firm's ex-boss not liable if post-dated cheque bounces: SC A company's former director need not necessarily be prosecuted for issuing a post-dated cheque which bounced on presentation after his resignation from the firm, the Supreme Court has said. The liability of such a person would arise only if the complainant takes care to specifically aver in the complaint about the accused's role in issuing the bounced cheque, a bench of Justices S B Sinha and M K Sharma, said. "When post dated cheques are issued and the same are accepted, although it may be presumed that the money will be made available in the bank when the same is presented for encashment, but for that purpose, the harsh provision of constructive liability may not be available except when an appropriate case in that behalf is made out," the bench observed. The bench passed the ruling while dismissing the appeal filed by DCM Financial Services challenging a Delhi Sessions Court's decision to discharge, J N Sareen, a former director of International Agro Allied Products Ltd. Sareen, as managing director of the company on 3rd April, 1995, issued a post-dated cheque to DCM Financial Services Pvt Ltd towards a business transaction for an amount of Rs 2,01,298. Sareen Resigned from the company on 25th May, 1996. The said post dated cheque due for clearance on 28th January, 1998 was dishonoured at the bank due to insufficient funds. The aggrieved company filed a case against a number of officials of International Agro Allied Products Ltd including Sareen.

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