Case Law Details
Geeta Singh Vs Pradeep Singh (Delhi High Court)
If a company is a drawer of the cheque, it is a necessary party to proceedings initiated under Section 138 of the NI Act. The liability of a private person, in his capacity of a Director or any other authority to act on behalf of the Company, if has to be severed from the liability of the Company, cannot arise against him when the Company itself is also an accused. Such liability against the person would arise when the accused person has issued the cheque in his personal capacity which is distinguishable from his capacity as an employee or Director of a company. Where the Company has also been accused, the liability cannot be said to have been arisen only qua the private person and the Company has to be proceeded against legally by giving it an opportunity to be heard.
In the present case, the accused Company was made a party to the complaint case without being furnished a notice, thereby, without it an opportunity to defend itself. In such a situation, had the Company been held guilty of the offence under Section 138 of the NI Act, it would have been without giving it a fair an equitable opportunity of defending itself, since, the fact remains that it was never intimated about the dishonour of the cheque, as per requirement of the Act. The perusal of the cheque also reveals that although it was signed by the respondent, it bears the name of the accused Company and not the respondent, hence, being a separate entity, the prime liability also pertained to the Company as the drawer of the cheque. At the outset, the complaint against the Company, hence, was not maintainable.
Since, the drawer of the cheque was the accused Company, solely on the ground that the respondent had signed the cheque, a liability under Section 138 of the NI Act did not arise against him. The complaint was prima facie not maintainable against the Company as drawer of the cheque, the liability towards the respondent also did not arise keeping in view that respondent was acting on behalf of the Company and where the liability against the Company had been discharged, a private and severed liability against the respondent could not have arisen in the circumstances of the instant matter.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
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