Company not named accused in cheque bounce case, can signatories be acquitted?

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  • #3462

    Anonymous
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    In 138 NI Act case when the Housing Finance Company evades the notice and signatories of the cheque are proceeded with, can the signatories of the cheque be acquitted because the charges on the company was not pressed as if company was not arrayed as accused following Aneeta Hada v. Godfather Travels & Tours Private Limited, (2012) 5 SCC 661?

  • #3470

    In the case of Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : 2012 Cri LJ 2525 : AIR 2012 SC 2795, the question before a three-judge bench of the Supreme Court was whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company being arraigned as an accused. It was held that where the cheque was issued in the name of the company, for maintaining the prosecution under Section 141 of the Negotiable Instruments Act against a Director, arraigning of a company as an accused is imperative. It was held that prosecution against a Director or authorised signatory of cheque, where the cheque was issued by the company was not maintainable without arraigning of company as accused.

    It was further held that, however, the only exception would be in a case applying principle of lex non cogit ad impossibilia, i.e., if for some legal snag, company cannot be proceeded against without obtaining sanction of a court of law or other authority, trial as against the other accused may be proceeded against if ingredients of S. 138 as also S. 141 are otherwise fulfilled. In such an event, it was clarified that it would not be a case where company had not been made an accused but would be one where company cannot be proceeded against due to existence of a legal bar. It was held that a distinction must be borne in mind between cases where a company had not been made an accused and the one where despite making it an accused, it cannot be proceeded against because of a legal bar.

    Therefore, if the company is not named as an accused person, then the case against the signatory of the cheque (which was issued by the company) is liable to result in acquittal.

         


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles.

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