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Supreme Court Says Liability Can’t Be Fixed Upon For Check Dishonor Merely Because Person Was Partner Or Was Guarantor For Loan

Supreme Court Says Liability Can’t Be Fixed Upon For Check Dishonor Merely Because Person Was Partner Or Was Guarantor For Loan
Written by Arindam
Supreme Court Says Liability Can’t Be Fixed Upon For Check Dishonor Merely Because Person Was Partner Or Was Guarantor For Loan

Supreme Court: The Supreme Court has said that a person cannot be held guilty for a check bounce merely because that person was a partner in that firm and had become a guarantor for the loan. The Supreme Court of the country said that under Section 141 of the NI Act, action cannot be taken against a person merely because the liability under the Partnership Act falls on the partner.

A division bench of Justice Ajay Rastogi and Justice Sanjiv Khanna said that unless the company or firm commits an offence, the liability under section 141 cannot be fixed. The court said, “Unless the company or the firm has committed the offense as the prime accused, the persons shall not be liable and shall not be held liable.

More than 33 lakh check bounce cases in court
The court was deciding a petition challenging the conviction of the appellant on the bounce of a check issued by a firm in which he was a participant. The check was signed by another partner. The firm was not made an accused in the complaint. Let us tell you that check bounce is a big problem and more than 33 lakh check bounce cases are pending in the courts of the country. Out of which 7.37 check bounce cases have come to light only in the last 5 months. After which the court has advised the central and state governments to make such a scheme like loan waiver, in which cases of small amount check bounce can be exempted from legal action.

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