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TMI Blog2023 (3) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... th Mr. Bhomesh Bellam, Mr. Karma Vivan i/by Mr. Jugal Kanani for the applicant in APL/1205/2022, 1207/2022, 1208/2022 & 886/2022. Mr. Jatin P. Shah with Ms. Snehankita M. Munj & Ms. Shraddha Kamble for respondent no.2 in APL/1205/ 2022, 1207/2022 & APL/886/2022. Mr. Atal Bihari Dubey with Mr. Arvind Tiwari for the petitioner in WP/1250/2022. Mr. Kunal Dalal for respondent no.1 in WP/2075/2022. Mr. Niranjan Mundargi with Ms. Keral Mehta, Ms. Anisha Nair, and Mr. Khalid Kazi i/by Vis Legis Law Practice for the petitioner in WP/2644/2022. Mr. Rajesh Kanojia with Ms. Nikita Singh i/by Res Juris for respondent no.2 in WP/2644/2022. Mr. Sukrut Mhatre i/by Jyotirmai Deshmukh for the petitioner in WP/201/2022 & WP/4128/2022. Mr. Maniram R. Gaud for the petitioner in WP/2075/2022. Ms. Priya Rita i/by Disha Karambar & Associates for respondent no.2 in WP/201/2022 & WP/1250/2022. Mr. Niranjan Mundargi with Mr. veerdhawal Deshmukh i/by Mr. Naved Askari for the petitioner in WP/3443/2022. Ms. Y.N. Katpitia with Ms. R.B. Mrolia i/by Kry Legal for respondent no.2 in WP/3443/2022. Mr. Ansh Karnawat with Mr. Paras Yadav and Mr. Vivek Babar i/by Ruturaj Bankar for the applicants in APL/967 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual's cheque, the drawer is the signatory from whose account the cheque is drawn. Similar would be a case of a company being a legal person, it is a living being who can sign the cheque, but the cheque is issued from the account of the company, and, therefore, the signatory of the cheque does not become a drawer. (iii) Under sections 30 and 31 of the act, it is the drawer of a cheque who is bound to compensate the holder in case of dishonour. The responsibility and liability for honouring the cheque is that of the drawer only. Such liability arises at the first instance to ensure that the cheque is honoured on presentation. Such responsibility and obligation to honour the cheque can only be traced to the drawer company and not to an individual authorised signatory, whether he is a director or not. If the cheque bounces, the drawer is liable to pay the payee, provided a demand notice is given to him. The requirement to have sufficient funds in the account from which the cheque is issued is only with the drawer company and not the authorised signatory. (iv) As an illustration, in the case of a large public limited company authorising a salaried employee as a signa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque is the principal offender who alone is liable for an offence. (x) Section 141 of the Act is incorporated in the statute to widen the dragnet of the offence under section 138, which has been committed by the drawer alone, to include other persons who are made vicariously liable, particularly when the principal offender is a company. The word 'drawer' is used in singular and plural; therefore, it is restricted to the principal offender only and not persons who fall within the dragnet of being vicariously liable either under section 141(1) or 141(2) of the act. There is no provision analogous to section 141 of the Act found in section 143A to rope in individuals. (xi) In the case of the company, the notice under proviso(b) of section 138 of the NI Act has to be issued to the drawer of the cheque, i.e. company and not to the authorised signatory of a cheque as it is the company who is liable to make payment under the cheque. Section 138 of the NI Act requires a cheque to be issued on an account maintained by the drawer in his personal capacity. (xii) Learned senior advocate, after taking me through the judgment in the case of Aneeta Hada (supra), submitted that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings can be initiated against such drawer. (xvi)Drawing sustenance from the judgment of the Apex Court in the case of S.M.S. Pharmaceuticals Ltd. V. Neeta Bhalla, reported in (2005) 8 SCC 89, it is submitted that the liability of the signatory of the cheque or the managing directors or joint managing director would only be under section 141(2) of the NI Act which is in relation to section 138 of the NI Act, provided he has done overt the act on behalf of the company. (xvii) Relying on the judgment of the Apex in the case of Aparna A. Shah v. Sheth Developers (P) Ltd., (2013) 8 SCC 71, he submitted that the criminal liability on account of dishonour of cheque primarily falls on the drawer. If the drawer is a company, then dragnet is extended to its officers under section 141 of the NI Act. (xviii) In support of his submission, he relied on the judgments in Dashrath Rupsingh Rathod v. State of Maharashtra reported in (2014) 9 SCC 129, Major General A.S. Gauraya v. S.N. Thakur reported in (1986) 2 SCC 709, Nandkishor Prallhad Vyvhare v. Mangala W/o Pratap Bansar reported in (2018) 3 MhLJ 913, Pawan Kumar Goel V. State of U.P. & Anr. reported in (2022) SCC OnLine SC 1598, S.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia and Others reported in (1987) 1 SCC 730 and The Vanguard Fire and General Insurance Co. Ltd. Madras v. M/s. Fraser and Ross and Another reported in AIR (1960) SCC 971. 3. Mr. Sharan Jagtiani, learned senior advocate appearing on behalf of the complainant, made the following submissions: (i) The authorised signatory of a company becomes the drawer for the purpose of sections 138 and 143A of the NI Act as he has been authorised to do so in respect of the account maintained by the company. (ii) The Apex Court, in the case of Aneeta Hada Vs. Godfather Travels & Tours Private Limited reported in 2012 5 SCC 661 has held that the authorised signatory of a company becomes drawer as contemplated by section 7 of the NI Act. The law laid down in the case of Aneeta Hada (supra) is still a good law and has been repeatedly considered and followed in subsequent judgments by the Apex Court. When the Supreme Court has rendered a particular decision, it must be followed by the High Court and the subordinate Courts unless it is distinguished, overruled, or set aside. The observations of the Apex Court, which may not be strictly called the ratio decidendi of the judgment, are still binding on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal conclusion, and the court has to ensure all the facts and circumstances that are incidentally or inevitably corollary to be given effect to the fiction. (vii) Moratorium provisions contained in section 14 of the insolvency and bankruptcy code would apply only to the corporate debtor, and natural persons mentioned in section 141 of the NI Act would continue to be statutorily liable. (viii) Mr. Jagtiani, in support of his submissions, relied on the judgments in Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd. reported in (2012) 5 SCC 661, N. Harihara vs J Thomas reported in (2008) 13 SCC 663, Pawan Kumar Goel v. State of U.P. and Anr. reported in (2002) SCC Online SC 1598, P. Saravana Kumar v. S.P. Vijaya Kumar reported in (2022) SCC Online Mad 1387, S.P. Mani & Mohan Dairy vs. Dr. Snehalatha Elangovan reported in (2022) SCC Online SC 1238, South Central Railway Employees Cooperative Credit Society Employees Union v. B. Yashodabai reported in (2015) 2 SCC 727, Peerless General Finance and Investment Company Limited v. Commissioner of Income Tax reported in (2020) 18 SCC 625, Oriental Insurance Co. Ltd v. Meena Variyal reported in (2007) 5 SCC 428, Municipal Committee, Amr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court laid down a precise ratio a person does not become a drawer merely because he signs the cheque. The word "every" in paragraph 22 of the said judgment includes any person who signs the cheque, and none of these persons become the drawer. He submitted that if the submission of the respondent is accepted to hold that the authorised signatory becomes drawer, it will run counter to the judgments of the Apex Court in the case of (i)Aneeta Hada (supra) (ii) N. Hariharu Krishnan (supra) (iii)S.M.S. Pharmaceuticals Ltd. (supra). 5. Neither section 141(1) nor 141(2) confers power on the Magistrate to pass an order of interim compensation against the person covered by Section 143A. Section 148 uses the expression 'appellant', which is different from the signatory of a cheque. A conjoint reading of sections 30 and 31 of the NI Act militates against the proposition that the authorised signatory is a drawer in the case of a company. Proceedings under section 143A are criminal in nature as the amount of compensation is recovered by following procedure under section 421 of the Code of Criminal Procedure. Apart from the said fact, the proceedings under section 143 are triable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dishonoured cheque is issued from such account. Section 141 of the act is not attracted in relation to the payment of compensation under section 143A of the NI Act. 8. Mr. Ansh Karnawat forensically made his submissions by submitting that the word drawer in section 143A has a clear and unambiguous meaning. The word 'drawer' has obtained a fixed and legal connotation over the years, which has been consistently held to include only principal offenders and not vicariously liable persons. He submitted that a purposive interpretation of the statute could be adopted only if a plain reading of the section creates an absurdity, contraction, and unworkable consequence. Amplifying the submissions, it was strenuously urged by relying on statements and objects of the Negotiable Instruments Act (Amendment Act, 2018), the objective was to make the drawer of the cheque pay interim compensation and was not the object to extend vicarious liability at the pre-trial stage. By referring to the opening remarks in the minutes of the Lok Sabha debates, he submitted that the liability was proposed to be created upon the "issuer" of the cheque. 9. Learned advocate invited my attention to the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company from the purview of section 148 of the NI Act will completely defeat the purpose of section 148. Placing reliance on the judgment of the Apex Court in the case of Surinder Singh Deswal @ Col. S. S. vs. Virender Gandhi reported in Criminal Appeal Nos.1936-1963 of 2019, she submitted that the Apex Court had directed the accused to deposit a minimum of 20% amount of fine and compensation awarded by the Trial Court. She submitted that if the petitioner's interpretation of section 148 is accepted, it would amply that in no case of dishonoured cheque, suspension of sentence of imprisonment can be ordered by the Appellate Court on condition of deposit and every order of suspension of a sentence need to be passed without deposit of any amount. According to her, section 148 applies to all appellants filing an appeal against conviction under section 138 of the Act. She emphasised on word 'appellant' in sub section (1) of section 148 to urge that if the legislature intended to restrict the ambit of section 148 of the NI Act to only the drawer against the conviction, the legislature would have provided so in the section instead of using the word 'appellant'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 2956 and G.J. Raja Vs Tejraj Surana reported in AIR 2019 SC 3817. 15. The rest of the advocates appearing in respective matters adopted submissions by Mr. Ponda and Mr. Jagtiani respectively. 16. I have given my anxious consideration to the rival submissions. 17. As the controversy revolves around the construction of the provisions contained in sections 7, 30, 31, 138, 143A and 148 of the NI Act, the relevant provisions deserve extraction as under : "7. "Drawer" "Drawee".-The maker of a bill of exchange or cheque is called the "drawer"; the person thereby directed to pay is called the "drawee". 30. Liability of drawer.-The drawer of a bill of exchange or cheque is bound in case of dishonour by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonour has been given to, or received by, the drawer as hereinafter provided. 31. Liability of drawee of cheque.-The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required so to do, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this chapter.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section,- (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm. 143A. Power to direct interim compensation.- (1) Notwithstanding anything contained in the Code of Criminal Procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal: Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.]" 18. As per Section 7 of the NI Act the maker of a bill of exchange or cheque is called the "drawer;" the person thereby directed to pay is called the "drawee." Drawer is a person who draws an instrument in writing. He is a person who draws a bill of exchange or cheque. Sections 138, 143A and 148 fall under chapter XVII of the Act, entitled "all penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts". In the context of the question involved, a plain reading of section 138 of the NI Act makes it evident that the said section is controlled by the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h an eventuality all such persons who at the time when the offence was committed, were in charge or responsible for the conduct of the business of such company or firm or association of individuals. The criminal liability for the offence by a company under section 138 of the Act is fastened vicariously on the persons referred to in sub-section (1) of section 141 by virtue of a legal fiction. To widen the dragnet of an offence under section 138, which is committed by the drawer only, the persons other than drawer are made vicariously liable. It is well settled that all other persons, such as signatories of the cheque, managing directors, and in-charge directors, are brought into the dragnet on the touchstone of vicarious liability under section 141 of the said act. 20. Having considered the scheme of relevant provisions of the NI Act, to answer the question framed, it is necessary to understand the essential difference between Legal Entity or Legal Person and an individual, as in the facts of cases involved, cheques are signed by individuals as authorised signatories. A legal entity has rights and responsibilities and the capacity to sue and be sued under the law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meanings of words and expressions used in an Act must take their colour from the context in which they appear. The principle that the statute must be read as a whole equally applies to different parts of the same section. 24. The language of section 143A allows for a plain interpretation to the exclusion of all other rules of interpretation. The word 'drawer' in section 143A has a clear and unambiguous meaning. The legislature's intention as to who should pay interim compensation is clear in plain and simple language in section 143A. The plain interpretation of the expression 'Drawer' in section 143A gets support from the intent and purpose of the provision and the act. The Statement of Object and Reasons of the Negotiable Instruments Act (Amendment) Act, 2018 is gathered from the corresponding Bill of 2017, "2. It is proposed to amend the said act with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. The proposed amendments will strengthen the credibility of the cheques..." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bengal [(2004) 11 SCC 497], the apex court held as follows: "10. It is well-settled principle of interpretation that a statute is to be interpreted on its plain reading; in the absence of any doubt or difficulty arising out of such reading of a statute defeating or frustrating the object the purpose of an enactment, it must be read and understood by its plain reading. However, in case of any difficulty or doubt arising in interpreting a provision of an enactment, courts will interpret such a provision keeping in mind the objects sought to be achieved and the purpose intended to be served by such a provision so as to advance the cause for which the enactment is brought into force. If two interpretations are possible, the one which promotes or favours the object of the act and purpose it serves, is to be preferred. At any rate, in the guise of purposive interpretation, the courts cannot rewrite a statute. A purposive interpretation may permit a reading of the provision consistent with the purpose and object of the act but the courts cannot legislate and enact the provision either creating or taking away substantial rights by stretching or straining a piece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islature in that sense, long prior to the statue...the rule of construction of statutes will require, that the words in the statute should be construed according to the sense in which they had been so previously used, although that sense may vary from strict literal meaning of them..." 30. The additional principle of interpretation which supports the view that the expression 'drawer' does not include 'authorised signatory' is that when a term has achieved a technical connotation over the years of its usage, the connotation must not be disturbed. The expression 'drawer' has obtained a fixed and legal connotation over the years on account of (i) the legislature never having changed said definition nor the context in which the expression is used, (ii) the judicial pronouncements having consistently held drawer to include only the principal offender and not those who are vicariously liable. Such legal connotation to the expression 'drawer' in section 143A strengthens from the clear, unambiguous meaning that the expression 'drawer' has always had. Such interpretation gets further support from the stage at which liability on the drawer to pay interim compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess or implied, relating to goods to be completed by passing of title in those goods. It is of the essence of this concept that both the agreement and the sale should relate to the same subject-matter. .............." 32. According to the respondents, amended provisions of section 143-A and section 148 need to be interpreted, keeping in mind the rule of purposive interpretation. To consider said submission the rule laid down in Heydon's case which is also known as 'purposive construction needs to be noted which states that when the material words are capable of bearing two or more constructions, the most firmly established rule for the construction of such words "of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law)" . Even if a purposive interpretation were to be given, it would have to be to cure mischief. The mischief/purpose sought to be addressed by the legislature is to provide interim compensation to the holder of the cheque. That purpose has already been served by imposing liability on the drawer company. Additionally, reading sections 143A and 148, suggested by respondents, would constrain this court to read something in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' and members' identities. However, directors can be personally liable for their acts under the Companies Act 2013 if there is a breach of fiduciary duty or an instance of fraud. A company is considered a separate legal entity, distinct and independent of the persons that constitute it. This conception is primarily understood as the veil of incorporation, a principle that separates the legal personality of a company from its members, thus affording them protection against personal liability towards the debts and obligations of the company. After the stage of recording a plea by the magistrate, such an enquiry as regards a breach of fiduciary duty or instance of fraud is not contemplated by the legislature while inserting section 143-A as it would defeat the purpose of granting immediate interim compensation to obviate delay in disposal of cheque dishonour case. 35. Another argument of the effect of legal impossibility, such as section 14 of the IBC, which prevents a drawer company from being compelled to pay interim compensation, derives no support to include authorised signatories within expression 'drawer' as such legal impossibility is created by Act of the parlia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a term in a provision containing that term makes it unworkable and otiose, it can be said that the definition does not apply to that provision because of a contrary context. [see. Indian Immigration Trust Board of Natal v Govindaswamy, AIR 1920 PC 114, p 116; Vanguard Fire and General Insurance Co Ltd, Madras v Fraser & Ross, AIR 1960 SC 971, p 975 Special Officer and Competent Authority Urban Land Ceilings Hyderabad v PS Rao,AIR 2000 SC 843, p 844]. 37. In Central Bank of India v. Ravindra [(2002) 1 SCC 367], the question before the Constitution Bench was as to the meaning of the phrases "the principal sum adjudged" and "such principal sum" as occurring in Section 34 CPC as amended by the Code of Civil Procedure (Amendment) Act (66 of 1956) w.e.f. 1-11957. While repelling the contention of borrowers that the expression "on such principal sum" as occurring twice in the latter part of Section 34(1), which refers to interest pendente lite and post-decree, should be interpreted to mean principal sum arrived at by excluding the interest even if it has stood capitalised which would be consistent with the legislative intent as reflected in the report of the Joint Committee and sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........................ (ii) Person signing the cheque. The signatory of a cheque which is dishonoured, is clearly responsible for the act and will be covered under sub-section (2) of Section 141. Therefore, no special averment would be necessary to make him liable. (iii) .................................................. 39. The consistent view of the Apex Court while interpreting section 138 of NI Act which contains the expression 'drawer', is that person signing the cheque, i.e. signatory of a dishonoured cheque, is responsible for the act of dishonour under sub-section (2) of Section 141. The director in charge of and responsible for conducting the company's business at the relevant time is also liable but only under section 141(1) of the NI Act. The expression 'drawer' in section 138 has not been interpreted to include either signatory of the cheque or the signatory director. Despite the expression 'drawer' occurring in section 138, both- signatories of a cheque and in charge director have been held vicariously liable under section 141. 40. Moreover, liability for the punishment of persons specified in section 141(2) is triggered only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this section" and would thus take within its sweep the interim compensation directed to be paid under sub-section (1) of said Section 143-A. 14. The remedy for failure to pay interim compensation as directed by the court is thus provided for by the legislature. The method and modality of recovery of interim compensation is clearly delineated by the legislature. It is well-known principle that if a statute prescribes a method or modality for exercise of power, by necessary implication, the other methods of performance are not acceptable. While relying on the decision of the Privy Council in Nazir Ahmad v. King-Emperor [Nazir Ahmad v. King-Emperor, 1936 SCC OnLine PC 41 : AIR 1936 PC 253 (2) : (1935-36) 63 IA 372] , a Bench of three Judges of this Court made the following observations in State of U.P. v. Singhara Singh [State of U.P. v. Singhara Singh, AIR 1964 SC 358] . (AIR p. 361, paras 7-8) "7. In Nazir Ahmad case [Nazir Ahmad v. King-Emperor, 1936 SCC OnLine PC 41 : AIR 1936 PC 253 (2) : (1935-36) 63 IA 372] the Judicial Committee observed that the principle applied in Taylor v. Taylor [Taylor v. Taylor, (1875) LR 1 Ch D 426] , Ch D at p. 431 to a court, namely, that where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 41. It is, therefore, not possible to accept submission of respondents that power to direct interim compensation can be traced under section 141 in addition to section 143(A) of the NI Act. 42. Now it is necessary to turn to another facet of submissions by the parties where they derive support from seemingly conflicting observations of supreme court. Mr. Ponda, learned Senior Counsel relying on the judgment in the case of N. Harihara Krishnan (supra), submitted that the said judgment is rendered after the judgment of Aneeta Hada (supra) and considers it; therefore, the subsequent judgment of N. Harihara Krishnan (supra) is binding on this Court. According to him, observations made in paragraph 20 of the Aneeta Hada (supra) need to be read in the light of the observations made in paragraph 19. According to him, the observations made in N. Harihara Krishnan (supra) are more elaborate and authoritative. Per contra, according to Mr. Jagtiani, learned Senior Advocate observations made in paragraph 20 in Aneeta Hada (supra) are made by the bench consisting of three judges. The observations in N. Harihara Krishnan (supra) are made by the bench consisting of two judges. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In paragraph 19, 20, 58 and 59 of Aneeta Hada (Supra) it is observed as under "19.................. The emphasis has been laid on the factum that the cheque has to be drawn by a person on the account maintained by him and he must have issued the cheque in discharge of any debt or other liability." 20. Section 7 of the Act defines "drawer" to mean the maker of a bill of exchange or a cheque. An authorised signatory of a company becomes a drawer as he has been authorised to do so in respect of the account maintained by the company." 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the Section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant being a signatory in his capacity as a director of the company, would only be vicariously liable for the offence committed by the company. Relying on the judgment in the case of Aneeta Hada (supra), it was submitted that prosecution against the appellant (signatory) could not be successfully maintained without prosecuting the company. The Apex Court holds that the offence under section 138 of the Act is capable of being committed only by the drawer of the cheque. Commenting on a finding recorded by the High Court in the said case that the revision filed by the authorized signatory was not maintainable as the company did not choose to challenge the Trial Court's order, it was observed that the High Court failed to appreciate that the liability of the appellant (signatory) is only statutory because of his legal status as the director of the company. It is held that every person signing a cheque on behalf of the company on whose account a cheque is drawn does not become a drawer of the cheque. Such a signatory is only a person duly authorized to sign the cheque on behalf of the company/drawer of the cheque. 48. Reading paragraphs 21 and 22 of the judgment in N. Harihar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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