2023 (10) TMI 45 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - Authorised signatory to sign the cheque - liability of drawer of cheque - HELD THAT - This Court finds that the two cheques, which have come on record at Exhibit 22 and 23 goes to indicate that Rameshkumar N. Agraval has signed these cheques as Authorized Signatory of the Company namely Apar Steel and Casting Pvt. Ltd. Co. Thus, it has come on record that he is the authorized person in conduct of business of Apar Steel and Casting Pvt. Ltd. Co. Aforesaid cheques are dated 02.05.2015 and 15.04.2015, whereas the disputed cheque, which is placed on record vide Exhibit 8 is signed by Rameshkumar N. Agraval in his individual capacity is dated 25.03.2016. In case of MAINUDDIN ABDUL SATTAR SHAIKH VERSUS VIJAY D. SALVI 2015 (8) TMI 907 - SUPREME COURT , the Hon ble Supreme Court inter alia held that from a bare reading of Section 138 of the NI Act the essential ingredient to attract the liability is that a person who is made liable should be drawer of the cheque and should have drawn the cheque on account maintained by him with the banker, for the payment of any amount of money to any person from out of that account, for discharge in whole or part of any debt or other liability. Thus, in the context of aforesaid provisions as well as the principle laid down, a person who draws a cheque on account maintained by him for paying to the payee is alone liable for the offence under Section 138 of the NI Act. In the facts of the case, prima facie, this Court in present appeal would like to examine the aforesaid aspect in context of the two cheques, which has been brought on record vide Exhibit 22 and 23. Hence, this application requires consideration - Leave to appeal is granted.

Summary

Issues Involved:
The judgment involves an application under Section 378(4) of the Code of Criminal Procedure seeking leave to challenge an order of acquittal under Section 138 of the Negotiable Instruments Act.

Details of the Judgment:

Issue 1: Legal Enforceable Debt and Liability
The applicant, engaged in trading, entered into a transaction with the respondent, who issued cheques from the company account to settle outstanding amounts. When these cheques bounced, a personal cheque was issued by the respondent, which also bounced. The complainant filed a case under Section 138 of the NI Act. The Magistrate acquitted the respondent, stating the complainant failed to prove the legal enforceable debt. The applicant argued that the respondent, as the company director, was liable for the debt, supported by documents showing his authority. The Court granted leave to appeal, considering the cheques signed by the respondent in different capacities.

Issue 2: Director's Liability and Company's Authority
The applicant cited legal precedents to support the liability of a director who signs cheques on behalf of the company. The respondent's advocate contended that the complainant did not establish a legally enforceable debt against the respondent personally. The Court noted that while the respondent signed cheques as an authorized signatory for the company, the disputed cheque was signed in his individual capacity. Referring to Section 138 of the NI Act, the Court found the essential requirement for liability was met when a person drew a cheque from their account to discharge a debt.

Separate Judgment:
A Criminal Appeal was admitted based on the Court's analysis of the legal provisions and the specific circumstances of the case. The Court granted leave to appeal, indicating a need for further examination of the aspects related to the cheques presented as evidence.