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Company not liable for cheque drawn by employee in personal capacity

The Supreme Court of India has held in a recent judgment Mainuddin Abdul Sattar Shaikh vs. Vijay D Salvi (Criminal Appeal No. 1472 of 2009), that the accused in a proceeding under Section 138 of the Negotiable Instruments Act can be made liable there under even if the Company had not been named in the notice or the complaint, as on facts it held that there was no necessity for the complainant to prove that the said accused was in charge of the affairs of the company, by virtue of the position he held. The Court drew and applied the analogy from the proposition of law laid down in P.J. Agro Tech Limited and Ors.  Vs. Water Base Limited [(2010) 12 SCC 146] that ‘where the cheque is drawn by the employee of the appellant company on his personal account, even if it be for discharging dues of the appellant-company and its Directors, the appellant-company and its Directors cannot be made liable under Section 138’

Article referred: http://www.livelaw.in/where-the-cheque-is-drawn-by-the-md-of-a-company-on-his-personal-capacity-company-is-not-liable-even-if-it-is-for-discharging-the-dues-of-company-sc/

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