Defaulters On Cheques Liable To Prosecution

The Supreme Court ruled yesterday that companies which had issued cheques without sufficient funds in their bank accounts could be prosecuted by the creditors even if the companies had become sick later. The directors of these companies are also liable to face prosecution and can be sentenced to jail and pay fine.

This judgement was handed down in a large number of appeals filed by companies and their directors against those who had prosecuted them for issuing cheques that bounced. They have come up against the high court rulings, which were against them under Section 138 of the Negotiable Instruments Act. The bench consisting of Justice K T Thomas and Justice D P Mohapatra disposed of all of them in a single judgement.