2021 (3) TMI 437

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....he 1st respondent for an offence under Section 138 of the Negotiable Instruments Act was dismissed finding that the 1st respondent was not guilty. 2. According to the appellant, the appellant and the 1st respondent had acquaintance for several years and the appellant had advanced a sum of Rs. 6,49,500/- to the 1st respondent for the purpose of construction of his house. When the amount was demanded, the 1st respondent had in discharge of the above debt, issued a cheque for the above said amount, drawn on the South Indian Bank, Perinthalmanna Branch. The cheque when presented for payment was returned dishonored with an endorsement "insufficient funds". It is thereafter that the complaint under Section 138 of the Negotiable Instruments Act....

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....ed the cheque and for that purpose the company need not be made a party to the proceedings. It is the contention that only in cases where the liability is that of a company that Section 141 of the Negotiable Instruments Act, comes into play. I cannot agree with the contentions put forward on behalf of the Appellant. 6. In Anil Gupta v. Star India (P) Ltd., reported in [(2014) 10 SCC 373], the Hon'ble Supreme Court in paragraph 8 after extracting Section 138, states thus. "8. Section 138 of the Act deals with dishonour of cheque for insufficiency, etc. as follows: "138.Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banke....

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....ce." From the aforesaid provision, it is clear that only the drawer of the cheque falls within the ambit of Section 138 of the Act whether human being or a body corporate or even a firm. 7. In the case on hand, the cheque in question is signed by the respondent for and on behalf of the company and the cheque is issued on an account maintained by the company with the bank. As such, the drawer of the cheque can only be the company and not the signatory, who has affixed the signature on behalf of the company. A reading of Section 138 extracted above clearly shows that it is the drawer of the cheque who is deemed to have committed the offence under the section. It follows therefore that the offence if at all, in the case on hand can be sa....