What are the remedies available to ordinary persons when an offence under Section 141 of Negotiable Instruments Act is committed?

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A Cheque is a hard size paper that is presented before bank for making payment on demand. Section 141 of Negotiable Instruments Act 1881 deal with offences by companies.  if any ordinary person faces a situation where a cheque that is issued by a company is dishonoured then every person who was in-charge of the company at the time of offence was committed, director, manager, secretary of the company with whose consent the offence was committed under Section 138 is liable to be punished under Section 141 of the Act. Here main thing to be noted is that, every person means everyone who are in charge of the business of the company and not just connected with the company who are sought to be made criminally liable under Section 141 of the Act.

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Company means any body corporate which includes firm and association of individuals.  Director is a partner in a firm. Every director, Manager, Managing Director, Officer, Secretary are all included in relation to the company. In National Small Industries Corp. Ltd. vs. Harmeet Singh Paintal and Anr on (15 02 2010) Supreme Court has laid down guidelines to decide vicarious liability of company’s directors. Section 141 creates a vicarious liability and it makes a person criminally liable for someone else’s actions. Legal notice on behalf of payee is issued to the defaulter within 30 days of dishonour of cheque, and the defaulter does not pay the amount holder of cheque can file a criminal case. Complaint will be filed at a court in the city of bank’s location. It should be accompanied with affidavit and other documents in original then court will hear the complaint and issue summons to accused. Liability depends on the role one plays in the affairs of a company and not only designation.  Similar provisions of Section 141of NI Act is found other enactments which deal with offences by companies are Income Tax Act 1961, Minimum Wages Act 1948, Employees State Insurance Act 1948, Employees Provident Fund And Miscellaneous Provisions Act 1952.

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by Sushma Javare.