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TMI Blog2022 (4) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... s held legally valid. Fraudsters will open the Bank Account in the name of Proprietor concern by one individual and another individual will be nominated as Authorised Signatory. Allow the cheque drawn by the authorised signatory gets bounced and pleads that he is only the drawer of the cheque, but not the person maintaining the account. The Court cannot give an interpretation to the provision of law, which will be contrary to object of the Act and defeat the very purpose of the Act - this Court finds no merit in the petition to quash the complaint under Section 138 of the Negotiable Instruments Act, 1881 against the petitioner being the drawer of the cheque, and drawn the cheque as authorised signatory of the person who opened the account. Petition dismissed. - Crl. O.P. No. 31018 of 2019, Crl. M.P. Nos. 16884 and 16886 of 2019 - - - Dated:- 29-3-2022 - Dr. G. Jayachandran , J. For the Appellant : R. Baskar For the Respondents : S. V. D. Rajendra Prasad ORDER Dr. G. Jayachandran , J. 1. This Criminal Original Petition has been filed praying to call for the records in C.C. No. 2951/2019 pending on the file of the learned Metropolitan Magistrate, Fast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the account which he is maintaining as authorised signatory. Under Banking Law, the account holder need not necessarily be the person, who is authorised to maintain. Whether it is Company or Partnership firm or Proprietorship concern, bank permits persons to represent those entities on due authorisation or mandate. 6. Having signed the cheque in the capacity as the authorised signatory of the account holder, the petitioner becomes the drawer of the cheque. The authorisation given by the proprietor and the permission given by the Bank to the petitioner indicates that he is the person maintaining the account. Except the petitioner none else can maintain the account of the Proprietor concern, in view of the authorisation. The judgment relied on is different factual matrix and not applicable to the facts of the case in hand. 7. Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent. 8. Before adverting to the legal issues, the facts leading to the filing of the complaint is extracted below:- The first accused Thilagavathi and the second accused Saravanakumar are spouse. The first accused in the Proprietrix of 'M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails in the cheque especially if he is illiterate or if he is unable to prepare the same for some reason or due to any other justifiable reason. Thus, he may either prepare or create the cheque by himself or it cause the relevant details in the cheque to be filled up by another person under his instruments. But, the cheque shall be signed by the drawer himself. Section 138 of the NI Act, says, Dishonour of cheque for insufficiency, etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him on an account maintained by him with a banker. The opening words of Section 138 of the Negotiable Instruments Act reads as follows:- Where any cheque drawn by a person on an account maintained by him with a banker .......... Only he who issued the cheque drawn on an account maintained by them can be prosecuted for an offence under Section 138 of the Negotiable Instruments Act. In this case, admittedly, the cheque was not drawn on an account maintained by the petitioner herein and the same was drawn on an account maintained by the wife of the petitioner in the name of the proprietary concern run by her. The judgments of the Apex Court and this Court cited above squarely apply to the facts of the case on hand. 13. The facts of the Ragu Lakshminarayanan case relied in N. Gopalan case is regarding the challenge of the prosecution under Section 138 of the Negotiable Instruments Act, 1881, by a person not a signatory to the cheque. Reading of that judgment, we understand that, in the complaint, Fine Tubes had alleged that the first Respondent is a business concern and respondents 2 to 6, are its Managers, Directors and Partners. By representing themselves to be so re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code of Civil Procedure. The question came up for consideration also before this Court in Ashok Transport Agency v. Awadhesh Kumar [ (1998) 5 SCC 567] wherein this Court stated the law in the following terms: (SCC pp. 569-70, para 6) 6. A partnership firm differs from a proprietary concern owned by an individual. A partnership is governed by the provisions of the Partnership Act, 1932. Though a partnership is not a juristic person but Order 30 Rule 1 CPC enables the partners of a partnership firm to sue or to be sued in the name of the firm. A proprietary concern is only the business name in which the proprietor of the business carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business. In the event of the death of the proprietor of a proprietary concern, it is the legal representatives of the proprietor who alone can sue or be sued in respect of the dealings of the proprietary business. The provisions of Rule 10 of Order 30 which make applicable the provisions of Order 30 to a proprietary concern, enable the proprietor of a proprietary business to be sued in the business names of his proprietary concern. The real pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when it is special, it applies to specific matter, such as the power to sign cheques, to make transfers, to receive money, to present documents, etc. Thus, the cheque issued by the constituted attorney in partial discharge of the debt is deemed to have been issued under the authority of the principal. Moreover, in the absence of the principal placing any material to show that the abovesaid authorization was revoked before the cheques in questions were issued, there was no substance in the submission made that the authorised signatory had retired and therefore, no liability was there on the principal. 18. One can easily visualise the object of Section 138 of the Negotiable Instruments Act, 1881, will be defeated, If the proposition canvassed by the petitioner is held legally valid. Fraudsters will open the Bank Account in the name of Proprietor concern by one individual and another individual will be nominated as Authorised Signatory. Allow the cheque drawn by the authorised signatory gets bounced and pleads that he is only the drawer of the cheque, but not the person maintaining the account. 19. The Court cannot give an interpretation to the provision of law, which will be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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