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2022 (4) TMI 300 - HC - Indian LawsDishonor of Cheque - drawer of the cheque - case of the petitioner is that he is the authorised signatory of the Proprietrix concern to sign cheques, but he is not the drawer of the cheque on the account maintained by him - criminal prosecution under Section 138 of the Negotiable Instruments Act 1881 - HELD THAT:- This Court put a pointed question to the learned counsel for the petitioner, whether if the account not blocked and sufficient fund available in the account, would the bank have cleared the cheque?. The answer was positive. Therefore, the understanding between the account holder, authorised signatory and the bank is that the cheque drawn by the authorised signatory will be honoured, provided there is sufficient fund available in the account. That means, the account opened in the name of the Proprietor concern, is in fact maintained by the authorised signatory and not the person in whose name the proprietor concern stands. One can easily visualise the object of Section 138 of the Negotiable Instruments Act, 1881, will be defeated, If the proposition canvassed by the petitioner is held legally valid. Fraudsters will open the Bank Account in the name of Proprietor concern by one individual and another individual will be nominated as Authorised Signatory. Allow the cheque drawn by the authorised signatory gets bounced and pleads that he is only the drawer of the cheque, but not the person maintaining the account. The Court cannot give an interpretation to the provision of law, which will be contrary to object of the Act and defeat the very purpose of the Act - this Court finds no merit in the petition to quash the complaint under Section 138 of the Negotiable Instruments Act, 1881 against the petitioner being the drawer of the cheque, and drawn the cheque as authorised signatory of the person who opened the account. Petition dismissed.
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