Diksha Priya, Haldia Law College, West Bengal
ABSTRACT
The present paper looks into the evolution of negotiable instruments concerning resigned Directors and uncashed cheques. The legal framework governing negotiable instruments is a commercial law designed to aid commercial activities and legitimize credit instruments that can easily be transformed into money, transferred from one party to another, and exchanged between banking institutions. Directors, as representatives of their companies, issue cheques to settle their liabilities with a predetermined loan repayment timeline. However, if a director has resigned but remains a co-signatory on a cheque, will they still be accountable for it? The financial sector's growth, especially in banking, has made cheques the most widely used negotiable instrument, but it also brings the risk of insufficient funds during the issuance of cheques. To protect the payee's interests and guarantee justice, Sections 138 to 142 were added to the Negotiable Instruments Act.
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