Authorized signatory of cheque, not being drawer, cannot be directed to pay interim compensation

Lyka Labs Limited Vs State of Maharashtra (Bombay High Court)

Bombay High Court held that the signatory of the cheque, authorized by the “Company”, is not the drawer in terms of section 143A of the Negotiable Instruments Act and cannot be directed to pay interim compensation under section 143A.

Facts- The issue involves that whether the signatory of the cheque, authorized by the “Company”, is the “drawer” and whether such signatory could be directed to pay interim compensation in terms of section 143A of the Negotiable Instruments Act, 1881 (hereafter “NI Act”, for short) living aside the company and whether a deposit of a minimum sum of 20% of the fine or compensation is necessary under Section 148 of NI Act in an appeal filed by persons other than “drawer” against the conviction and sentence under section 138 of the NI Act.

According to petitioners sections 143A and 148 need to be interpreted in plain language; whereas respondents submit that both provisions need to be interpreted by applying the rule of purposive construction.

Conclusion- Held that the signatory of the cheque, authorized by the “Company”, is not the drawer in terms of section 143A of the NI Act and cannot be directed to pay interim compensation under section 143A.

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