Skip to main content

Chq Bounce - Have to implead drawer of chq

SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 838 OF 2008 [Arising out of SLP (Crl.) No. 2094 of 2007] Aneeta Hada ...Appellant Versus M/s. Godfather Travels and Tours Pvt. Ltd. ...Respondent WITH CRIMINAL APPEAL NO. 842 OF 2008 [Arising out of SLP (Crl.) No. 2117 of 2007] JUDGMENT S.B. SINHA, J :


Aneeta Hada vs M/S Godfather Travels & Tours ... on 8 May, 2008

2. Appellant is said to be an authorised signatory of M/s. Intel Travels Ltd (Company). The said Company as also the respondent company had business transactions. Appellant on behalf of the company issued a cheque dated 17.1.2001 for a sum of Rs.5,10,000/- in favour of respondent which was dishonoured. Respondent filed a complaint petition against the appellant under Section 138 of the Negotiable Instruments Act, 1881 ('the Act' for short).

The Company which is a juristic person was not arrayed as an accused.

The learned Magistrate took cognizance of the offence against her. Respondent had not even served any notice upon the Company in terms of Section 138 of the Act. It served a notice only on the appellant presumably on the premise that she was in charge and responsible to the company for its day to day affairs.

4. A company being a body corporate is capable of suing and being sued in its own name.
Section 7 of the Act defines "drawer" to mean the maker of a bill of exchange or a cheque. The authorised signatory of a company does not become the drawer of the cheque only because he has been authorised to do so for the purpose of banking operations. Admittedly, the bank account was also in the name of the company. The account was, therefore, maintained by the Company.

6. A complaint petition may be maintainable at the instance of the person in whose favour the cheque was drawn only when:-
(i) the cheque was drawn by `a person'; and
(ii) the cheque was drawn 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 the drawer is insufficient to honour the cheque or that it exceeds the amount to be paid from that account; and
(iii)in that event `such a person' shall be deemed to have committed an offence.

7. The person referred to in the said provisions, therefore, must not only be the drawer of the cheque but should have been maintaining an account with the banker.

8. Appellant does not answer either of the descriptions of such `the person' referred to in Section 138 of the Act. Admittedly, she was only an authorised signatory and the amount with the banker was to be maintained by the Company. Cheque was drawn by the Company and not by the appellant. She did not do so on her own behalf. She issued the cheque in course of ordinary business transaction.

9. The Parliament for meeting a contingency of this nature, namely, where a company is an offender, has raised a legal fiction in terms whereof any person who at the time the offence was committed, was incharge of and was responsible for the conduct of business of the company, shall be deemed to be guilty of the offence.

10. For the said purpose, the company itself must be made an accused. It has been so held by this Court in a number of decisions to which I would refer to a little later.

11. In this case, indisputably the company is the principal offender. A director of the company inter alia can be proceeded against if he is found to be responsible therefor as envisaged under Section 141 of the Act.

13. If a person, thus, has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do. Legal fiction is raised both against the Company as well as the person responsible for the acts of the Company. Unlike other statutes, this Act raises a presumption not only in tems of Section 139 of the Act but also under Section 118(a) thereof. Those presumptions in given cases may have to be rebutted. The accused must be given an opportunity to rebut the said presumption. An accused is entitled to be represented in a case so as to enable it to establish that allegations made against it are not correct.

14. Section 141 of the Act raises a legal fiction. Such a legal fiction can be raised only when the conditions therefor are fulfilled; one of it being that company is also prosecuted.

15. The Section uses the terms "as well as the company". The company which is, thus, the principal offender must be included in the category of the accused. Here, I am not dealing with a case where an individual act of a person is purporting to represent a company. In relation to business transactions, a company as a corporate entity may have created its own reputation. It must maintain it. If a complaint is filed, in a given case, only on the basis of the presumptions raised in the statute, it may be held to be guilty as a result whereof the reputation of the company shall suffer. It may, thus, suffer grave civil consequences.

16. It is no longer res integra that a company can be proceeded against in a criminal proceeding, even where imposition of substantive sentence is provided for.

Comments

Popular posts from this blog

MACT - Permanent disability - calculate - compensation - Supreme Court - Part 2

1) C. K. Subramonia Iyer vs. T. Kunhikuttan Nair - AIR 1970 SC 376 2) R. D. Hattangadi vs. Pest Control (India) Ltd. - 1995 (1) SCC 551 3) Baker vs. Willoughby - 1970 AC 467 4) Arvind Kumar Mishra v. New India Assurance Co.Ltd. - 2010(10) SCALE 298 5) Yadava Kumar v. D.M., National Insurance Co. Ltd. - 2010 (8) SCALE 567) 5. The heads under which compensation is awarded in personal injury cases are the following : Pecuniary damages (Special Damages) (i) Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure. (ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising : (a) Loss of earning during the period of treatment; (b) Loss of future earnings on account of permanent disability. (iii) Future medical expenses. Non-pecuniary damages (General Damages) (iv) Damages for pain, suffering and trauma as a consequence of the injuries. (v) Loss of amen

Distinction between “Loss to the Estate” and “Loss of Estate”

A subtle but fundamental distinction between “Loss of Estate” and “Loss to the Estate” was discussed in Omana P.K. and others v. Francis Edwin and others (2011 (4) KLT 952). This Judgment was challenged before the Apex Court, which has now dismissed the Appeal. The question raised in this case, was whether a certain sum which the dependants received as compensation for untimely death of Judgment debtor in a motor accident is attachable in Execution Proceedings. In this case, Justice Thomas P. Joseph speaking for the Kerala High Court had held the following (relying on The Chairman, A.P.S.R.T.C, Hyderabad vs. Smt. Shafiya Khatoon and Others) Capitalized value of the income spent on the dependents, subject to relevant deductions, is the pecuniary loss sustained by the members of his family through his death. The capitalized value of his income, subject to relevant deductions, would be the loss caused to the estate by his death. In other words, what amount the dependents would have got le

Full & Final payment - No dues certificate - end of contract

Whether after the contract comes to an end by completion of the contract work and acceptance of the final bill in full and final satisfaction and after issuance a `No Due Certificate' by the contractor Supreme Court of India Supreme Court of India R.L. Kalathia & Co. vs State Of Gujarat on 14 January, 2011 Author: P Sathasivam Bench: P. Sathasivam, B.S. Chauhan IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3245 OF 2003 R.L. Kalathia & Co Appellant(s) Versus State of Gujarat .... Respondent(s) JUDGMENT P. Sathasivam, J. 1) This appeal is directed against the judgment and final order dated 07.10.2002 passed by the Division Bench of the High Court of Gujarat whereby the High Court set aside the judgment and decree dated 14.12.1982 passed by the Civil Judge, (S.D.), Jamnagar directing the State Government to pay a sum of Rs.2,27,758/- with costs and interest and dismissed the Civil Suit as well as cross objections filed by the a