Q: I am one of the named directors of a private limited company incorporated by my husband. However, I don’t play any active role in the running of the company. Recently, a cheque issued by the company was dishonoured on the grounds of insufficient funds. I have recently received a notice from the payee which says that he will take criminal action against me as the cheque has been dishonoured. Can I be held liable for the dishonoured cheque? Will I have to attend court hearings personally?
G.S.
A: Under Section 138 of the Negotiable Instruments Act 1881, the drawee of a dishonoured cheque is deemed to have committed an offence punishable by imprisonment or fine or both, if after receiving a demand for repayment she or he fails to make good the cheque amount within the stipulated time. If the drawee of the cheque is a company, Section 141 of the said Act specifies that criminal liability may fall not only on the company but also upon those persons who at the time of the commission of the offence were “in charge of and were responsible for the conduct of the business of the company”.
However, the Act provides that if such persons can prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent the commission of the offence, they will not be held liable. In fact, there are many cases where the courts have held that “sleeping partners” are not liable to criminal prosecution if it can be shown that they were not responsible for the daily management of the company. Thus, it appears that you have a legitimate defence against being prosecuted. Of course, if a summons for personal appearance is ultimately issued by a court, you are obliged to attend court, though if you can establish that it is difficult for you to attend court then under Section 205 of the Criminal Procedure Code, personal appearance may be dispensed with by the magistrate and you may be permitted to be represented by an advocate.
Q: My wife was an employee of a central government organisation. Soon after our marriage, she died. After her untimely death, I applied to her employer for her dues and other benefits, but was informed that the named nominee in the service records was her mother. Such nomination was made prior to our marriage. Does this nomination take away my right to claim her property?
D. Behara
A: Usually, the service rules of central government organisations provide that nominations made by employees in respect of their provident fund, gratuity and other pensionary benefits made before marriage are no longer valid after marriage. The reason being that at that point of time, the employee presumably had no separate family of his or her own. If there is a similar provision in the service rules applicable to your late wife, the nomination in respect of her mother will be deemed invalid. Even if there is no such rule, the legitimate heirs of the deceased employee can always claim their share from the nominee. Of course, there is no doubt that you are the intestate heir of your late wife, but the answer to your query would also depend on the manner in which the specific rules define “family” or the persons entitled to the particular benefits of provident fund or gratuity. The definition of “family” would definitely include “husband” but in some cases may also include dependent parents of the employee.
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