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Cheque complaint must name company

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Cheque complaint must name company
In a cheque-bounce case, the Supreme Court (SC) ruled last week that every person signing a cheque on behalf of a company on whose account a cheque is drawn does not become the drawer of the cheque. Such a signatory is only a person duly authorised to sign the cheque on behalf of the company/drawer of the cheque. The SC stated so while setting aside the judgment of the Madras High Court in the appeal case, Harihara Krishnan vs J Thomas. The complaint was filed against a director of a company without the company being made a party. The complaint could not stand without the company being made an accused. The company was impleaded after 1,211 days, much after the limitation period. The high court had condoned the delay because the criminal complaint against the director was already filed under the Negotiable Instruments Act (NIA) within time. The SC clarified that the principles of the Criminal Procedure Code (CrPC) could not be applied in a case under NIA. A case under the code requires investigation by the police and a charge sheet. The NIA has a summary procedure. The accused person should be named. “The offence under Section 138 of NIA is person specific. Therefore, Parliament declared that the provisions dealing with taking cognisance contained in the CrPC should give way to the procedure prescribed by the Act,” the judgment said.

The Business Standard, New Delhi, 04th September 2017

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