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2024 (11) TMI 196 - HC - Indian LawsDishonour of Cheque - challenge to summoning Order - Cheque has not been signed by the petitioner but by a person, who is neither an employee nor a Legal Representative of the petitioner or his Proprietorship Firm - HELD THAT - Pertinently, the Cheque in question has been dishonoured on the ground of signature being different, which again implies that Bhagawat Daulat Gawali had no authority to sign the Cheque for and on behalf of the petitioner-accused or his Proprietorship Firm. The Cheque does not bear the signatures of the petitioner-accused and therefore, cannot be held liable either for the issuance of Cheque or its consequent dishonour. The assertion of the respondent No. 2-Complainant that Bhagawat Daulat Gawali had issued the Cheque for and on behalf of the petitioner-accused in discharge of his liability is not tenable under Section 138 of NI Act, 1881. This may be a valid ground for filing a Suit for Recovery but definitely under Section 138 of NI Act, 1881 which is specific and is applicable only to the Drawer and Drawee of the Cheque, no third party can be summoned under Section 138 of NI Act, 1881. Therefore, the petitioner-accused not being a signatory to the Cheque, cannot be summoned in the Complaint Case under Section 138 of the NI Act, 1881 filed for and on behalf of the respondent No. 2-Complainant. The Summoning Order dated 01.02.2021 is patently illegal and is hereby set aside - Petition disposed off.
Issues:
1. Validity of the Summoning Order under Section 138 of the Negotiable Instruments Act, 1881. 2. Liability of the petitioner as the sole proprietor of a proprietorship firm for a dishonored cheque not signed by him. Analysis: Issue 1: The petitioner filed a petition under Section 482 of the Code of Criminal Procedure seeking to quash a Complaint Case under Section 138 of the Negotiable Instruments Act, 1881. The respondent, Tiger Logistics (India) Limited, alleged that the petitioner, as the sole proprietor of M/s Amax Agro Exports, issued a cheque that was dishonored. The petitioner claimed that the cheque was signed by another individual, Bhagawat Daulat Gawali, and not by him. The court examined the legality of the Summoning Order dated 01.02.2021, which summoned the petitioner based on the complaint. The court noted that the petitioner, not being the signatory of the cheque, could not be held liable under Section 138 of the NI Act, which specifically applies to the drawer and drawee of the cheque. The court found the Summoning Order to be illegal and set it aside, ultimately quashing the Complaint Case. Issue 2: The core issue revolved around the petitioner's liability as the sole proprietor of the proprietorship firm for a cheque issued by another individual. The court emphasized that under the law, a proprietorship firm does not have a separate legal entity, and only the sole proprietor can be held responsible. Despite the cheque bearing the stamp of the firm, the absence of the petitioner's signature raised doubts about his involvement in the transaction. The court highlighted that the cheque was dishonored due to a mismatch in signatures, indicating that the individual who signed the cheque did not have the authority to do so on behalf of the petitioner or his firm. The court concluded that since the petitioner was not the signatory of the cheque, he could not be summoned under Section 138 of the NI Act. Therefore, the court quashed the Complaint Case against the petitioner, emphasizing that liability under Section 138 is specific to the drawer and drawee of the cheque. In conclusion, the High Court set aside the Summoning Order and quashed the Complaint Case against the petitioner, ruling that he could not be held liable for a dishonored cheque that he did not sign.
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