Who's Responsible When a Cheque Bounces? Seeking Clarity on My Role as a Signatory

Hi,

I am working as an administrator in a corporate office. In our company, there are four authorized signatories, and it is mandatory, as given to the bank, that any two should sign the cheque, regardless of the amount. Out of the four, I am one of the authorized signatories. Now, the problem is that I have signed a cheque for Rs. 9.00 lakhs, which has bounced due to insufficient funds.

Here, I want to know who is responsible when the cheque bounces. In any circumstances, am I responsible because the signature is mine?

Awaiting your valued reply.

Deepthi

Don't worry. Nothing will happen. Don't take tension. Just call up the bank authorities, the other party. And if they know you, then it's too good. They will handle the situation.

This situation has arisen in our companies sometimes, and our accounts guy knows how to handle it. :P :P But be careful next time and double-check the balance before issuing a check.

If you don't believe me, be ready. The police vans would come soon, and you will be behind the bars. Eeek, just think how it would be to be in jail, and the police asking you questions with a torchlight. Eeek, they may come at any time, and then your long trips to court will start.

Hey, I'm sorry. Don't worry, yaar. Contact your finance department and ask them to handle this case. Speak with the branch manager of the bank and explain the situation.

Hi,

Legally, both signatories are jointly and severally liable. But don't worry. Before prosecuting you, the other party has to issue you a legal notice claiming the amount. You can accept the liability (I mean your company) and make the payment.

S.M. Paranjape, Advocate