The Delhi High Court comprising a bench of Hon’ble Mr. Justice Anup Jairam Bhambhani in the matter titled Man Mohan Patnaik v. CISCO Systems Capital India Pvt. Ltd. & Ors., Crl. MC 6461 of 2022 & Crl. MA 25177 of 2022 has held that a retired officer of a Company who had signed a cheque during his employment / tenure is not guilty for the offence of Cheque Bounce.
In the matter, the Petitioner was one of the signatories to post-dated cheques dated 30.07.2018 and 30.08.2018 which were issued on behalf of M/s. Ortel Communication Ltd. The Petitioner however retired as a Chief Technology Officer on 06.01.2018. The said post dated cheques bounced and proceedings under Section 138 of the Negotiable Instruments Act were initiated against the Petitioner.
The Petitioner placed on record the documents showcasing that he had retired on 06.01.2018 and as such no offence is made out against him since the Cheques in question were presented 9 months after his retirement.
The Court with reference to Section 141 of the Negotiable Instruments Act, 1881 observed as follows:
“13. Furthermore, section 141 of the NI Act is clear, that if the person committing the offence under section 138 is a company,
“…every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company…shall be liable to be proceeded against and punished accordingly
(emphasis supplied)
Clearly therefore, on a prima facie view, merely being a signatory to a cheque does not, in and of itself, make a person guilty of the offence under section 138 of the NI Act. The offence is triggered at the stage when a cheque is returned unpaid by the bank inter-alia for insufficiency of funds. For guilt to be imputed to an officer of a company, at the very least, the officer should have been responsible for the business and affairs of the company and for honouring the cheque on the date that the cheque was returned unpaid.
14. In the present case, it is clear that though the petitioner co-signed the cheques in question, he had retired from the company more than 09 months before the cheques came to be presented; and could not therefore have ensured sufficient funds in the bank account of the company to honour the cheques, even if he had so desired.” (emphasis supplied)
Therefore, the High Court was of the view that since the Petitioner who had retired as an official of the Company at the time when the said cheque was presented to the Bank, he could not be held responsible for the offence for cheque bounce since at the time of the cheque being presented in the Bank, the Petitioner could not have made sure that there were sufficient funds in the Bank Account of the Company to honour the cheques.
