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Company Law Case Law.
Bharat Heavy Electricals Ltd. has separate bank A/C in ABC Bank for its business activities. While issuing cheque on behalf of company, director mentioned name of the company as BHEL which is very popular in practice. It resulted in bounce of cheque which amounts to payment of noting charges. Determine who is bound to pay the charges imposed by bank and state your reason in supporting your answer.
Replies (7)
Company has to pay for the fault as they didn't register the alias name I.e. BHEL in Bank Account details and the bank transactions happens through full name provided by the company. It doesn't matter even if company is notable under BHEL in market. Bank will scrap the cheque if the seal and signature doesn't match to their database details.
Okay. Thank you.
you're welcome
But can company have an option to register its name as BHEL ? And if it possible then can company issue cheque by name BHEL ???
The authorised person have to issue a letter to the branch manager regarding alias name so that he can add it to the account details in their system for further transactions in the name of BHEL.
thank you for reply..
your welcome...
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