Firm MD, director get 1-year RI in Rs 50 lakh cheque-bounce case

A local court has sentenced Jitender Singh, MD, and Gurmeet Sodhi, director of M/s Kudos Chemie Ltd., Kuranwala village, Barwala road, Dera Bassi, to undergo one year rigorous imprisonment in a cheque-bounce case.

The court pronounced the judgment on a complaint filed by Deputy Commissioner of Income Tax, Chandigarh, under Section 138 of the Negotiable Instrument Act, 1881, on account of dishonouring of Rs 50 lakh cheque drawn on UCO Bank, Dera Bassi, in favour of the department.

The Deputy Commissioner in the complaint filed before the court said the Income Tax Department assessed the company for income tax in 2012. The total tax liability of the company was assessed at Rs 12.85 crore. A show-cause notice was issued to Jitender Singh and Gurmeet Sodhi in 2014, giving them an opportunity to deposit the tax.

The accused as part of partial discharge of their tax liability issued three different cheques, all drawn on UCO Bank, Dera Bassi, but they bounced on March 25, 2015, with the remark of ‘exceeds arrangement’. Thereafter, a legal notice, dated April 11, 2015, was issued by the complainant to the accused, asking them to make the requisite payment within 15 days. But the accused failed to make the said payment.

A notice under Section 138 was sent to the accused. The counsel of the accused argued that there was no legal liability towards the complainant and the cheques were given to the Deputy Commissioner as security cheques.

After hearing of the arguments the Judicial Magistrate, First Class, said it was very strange as to why a government department would take security cheques as this was not outstanding due from any business transactions, but a statutory liability against the accused.

The court held the firm and its directors liable and convicted them for the commission of offence punishable under Section 138 of the NI Act on account of cheque bounce.