TMI Blog2023 (3) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... n being to which the law attributes personality. A juristic person is a body of persons, a corporation or company, a partnership or other legal entity recognised by law as the subject of rights and duties, also called an artificial person. An entity, such as a company, is created by law and given certain legal rights and duties of a human being. It is therefore evident that authorised signatory being individual cannot be equated with or termed as a legal entity created under a statute. For appreciating submissions on interpretation of statute, well-settled rule of interpretation of a statute needs to be borne in mind that when a language of a provision is plain and unambiguous and capable of only one meaning, there is no question of the construction of a statute, as the provision speaks for itself. The natural and ordinary meaning of words should only be departed from if it is shown that the legal context in which the words are used requires a different meaning. In that case, it would not be open to the courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the act. It appears that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of another. It is observed that 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. Therefore the prosecution of other persons under Section 138 NI Act is permissible only when the company is named as an accused in the complaint. Having held that the expression drawer in section 143A does not include the authorized signatory of a company, amended section 148 needs to be interpreted accordingly. The plain language of section 148 makes it clear that the Appellate Court is granted the power to direct deposit of a minimum sum of 20% of the fine or compensation awarded by the Trial Court in an appeal by the drawer . Section 148 emphasizes such power being conferred only in an appeal by the drawer - Proviso to section 148 clarifies that such payment shall be in addition to the amount payable under section 143A. The expression drawer under section 143A does not include the authorized signatory of a company; therefore, the language of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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/967/2022. Mr. Sharan Jagtiani, Senior Advocate with Mr. Gautam Ankhad, Mr. Vishal Narichania, Mr. Tushar Gujjar, Mr. Deepak Singh, and Briti Machdani i/by SL Partners for respondent no.2 in WP/4128/2022. Ms. Jaldhara Shah with M. Shrinidhi i/by Bharucha Partners for respondent no.1 in APL/967/2022. Mr. Aabad Ponda, Senior Advocate with Mr. Pulkitesh Dutt Tiwari and Bency Ramkrishnan i/by Akash Menon for applicant in APL/240/2021. Mr. Sandeep Kumar Singh i/by SKS Juris for respondent no.2 in APL/240/2021. Ms. Mahalaxmi Ganpathy with Ms. Sayee Sawant and Ms. Savani Vaze for the petitioner in WP/4576/2022. Mr. Rishi Bhuta with Mr. Suraj Iyer, Mani Thevar, Ms. Kavita Sharma, Ms. Ankita Bamboli, Mr. Prateek Dutta, Ms. Saakshi Jha, Mr. Aashish Dubey, Mr. Ujjwal Gandhi, Mr. Anurag Ghag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed 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 signatory, can such employee be made liable for payment of interim compensation under section 143A for a cheque of thousands of crores. Such a signatory employee has no personal liability concerning the money transaction with the company, which is a legal person. (v) The power to direct interim compensation under section 143A of the NI Act is of draconian nature and tantamounts to adjudication and compensation amount before adjudication of guilt in a criminal trial. Therefore, such provisions are required to be strictly construed. (vi) Relying on the judgment of the Apex Court in the case of P .J. Agro Tech Ltd v. Water Base Ltd., reported in (2010) 12 SCC 146 , he submitted that a criminal or a quasi-criminal provision has to be strictly construed. Therefore, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 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 section 141 refers to section 138 of the NI Act. It makes other persons vicariously liable for compensation for an offence on the company's part. The words as well as the company appearing in section 141 makes it clear that when the company is prosecuted, then only persons mentioned in the other category could be vicariously liable for the offence. Therefore, it was held that for maintaining prosecution under section 141 of the Act, the arraignment of a company as an accused is imperative. If the word drawer is interpreted to mean authorised signatory, it will turn the decision in Aneeta Hada (supra) on its head. (xiii) Learned senior advocate endeavoured to rely on the judgment in the case of N. Hariharu Krishnan V. J. Thomas, reported in (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, 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. Mani and Mohan Dairy v. Snehlatha Elangovan reported in (2022) SCC OnLine SC 1238, Sunita Palita v. Panchami Stone Quarry reported in 2022 SC OnLine SCC 945, K.K. Ahuja v. V.K. Vora reported in (2009) 10 SCC 48, National Small-Scale Industries Corporation v. Harmeet Singh (2010) 3 SCC 330, Pooja Ravinder Devidsani v. State of Maharashtra and another reported in (2014) 16 SCC 1, Surinder Singh Deswal and Ors. v. Virendra Gandhi reported in (2019) 11 SCC 341, CESC Ltd and Others Vs. Subhash Chandra Bose and Others reported in (1992) 1 SCC 441, Yudhistir v. Ashok Kumar reported in (1987) 1 SCC 204, Bijaya Kumar Agarwala v. State of Orissa reported in (1996) 5 SCC 1, Regina v. Cuthbertson and Ors. reported in (1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 the High Court as obiter dictum in the absence of direct pronouncement on such question elsewhere by the Supreme Court. The judicial propriety, dignity and decorum demand that the Apex Court being the highest court in the country, even the obiter dictum of the Supreme Court, should be followed as binding. It is impermissible for the High Court to ignore the decision of the Supreme Court on the ground that the Supreme court laid down the legal position without considering another point. The decision of the Apex Court cannot be ignored on the ground that certain aspects of the law were not considered or relevant provisions of the law were not brought to the notice of the court. He submitted that when Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aravana 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, Amritsar v. Hazara Singh reported in (1975) 1 SCC 794, Suganthi Suresh Kumar v. Jagdeeshan reported in (2002) 2 SCC 420, Director of Settlements, AP v. MR Apparao, reported in (2002) 4 SCC 638, Pradip Chandra Parija and Ors. v. Pramod Chandra Patnaik and Ors. reported in (2002) 1 SCC 1, Central Board of Dawoodi Bohra Community and Anr. v. State of Maharashtra and Anr. reported in (2005) 2 SCC 673, Chandra Prakash and Ors v. State of U.P. and Anr. reported in (2002) 4 SCC 234, Kamleshkumar Ishwardas Patel vs. Union of India reported in 1994 MHLJ 1669, Union of India v. Subramanian reported in (1976) 3 SCC 677, The State of U.P. v. Ram Chandra Trivedi reported in (1976) 4 SCC 52, G.J. Raja vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. 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 by the Magistrate in the Criminal Court and are governed by the Code of Criminal Procedure. He submitted that if the respondent's interpretation is accepted, it will delay the disposal of cases, thereby frustrating the amended provision. The object of dealing with unscrupulous drawers with a heavy hand would get diluted entirely. Expansive interpretation of section 143A would result in writing down something in the statute which is not the function of the Courts but of the legislature. 6. In rejoinder, Mr. Sharan Jagtiani learned senior advocate submitted that the consequences of not including an authorised signatory in the expression 'drawer' would defeat the main i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 provisions of sections 14, 95 and 96 of the Insolvency and Bankruptcy Code, 2016 (IBC) to urge that at the time of bringing section 143A into force, the legislature was aware that there could be drawer companies who could be made to pay interim compensation in the light of moratorium imposed by section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) while undergoing corporate insolvency resolution process. In support of his submission, he relied on the judgment of the Apex Court in the case of Keshavji Ravji Co. Etc. Etc vs Commissioner Of Income Tax reported in (1990) 2 SCC 231, Sri Ram Saha v. State Of West Bengal Ors reported in (2004) 11 SCC 497 and State of Madras v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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'. 13. She submitted that in the facts of the case, there are only two directors: the petitioner and his wife. In the cross-examination, the petitioner admitted that he was in charge of the company's affairs and that his wife did not participate in any company activity. He also admitted his signature on the cheque; therefore, the learned Sessions Judge rightly directed the petitioner to deposit an amount of 20%. She submitted that, in the facts of the case, the petitioner accepted the liability on behalf of the company and admitted that he had issued a cheque in question which showed that the petitioner was playing an active role in dayto-day business. In conclusion, she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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, 1973, (2 of 1974), the court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant (a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and (b) in any other case, upon framing of charge. (2) The interim compensation under sub-section (1) shall not exceed twenty per cent of the amount of the cheque. (3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 expression where in a cheque drawn by a person on an account maintained by him . To attract liability under section 138, it is one of the preconditions that a cheque must be drawn on an account maintained by the drawer. The person contemplated in the section can be an individual or legal entity. The principal liability is imposed on the drawer. On a conjoint reading of sections 30, 31 and 138, it is evident that the obligation to honour the cheque is on the drawer. Reading section 138 of the NI Act makes it clear that the duty to maintain sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled 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. Legal persons, being the artificial creations of the law, maybe as many kinds as the law pleases. They include corporations or companies. A legal person is any subject matter other than a human being to which the law attributes personality. A juristic person is a body of persons, a corporation or company, a partnership or other legal entity recognised by law as the subject of rights and duties, also called an artificial person. An entity, such as a company, is created by law and given certain legal rights and duties of a human being. It is therefore evident that auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etation 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 25. The objective is to make the payee of the cheque pay interim compensation to provide relief to drawees from undue delay in the final resolution of the dishonoured cheque. The lawmakers' intention is also clear from the recorded minutes of Lok Sabha Debates conducted when the Bill was introduced and passed. In that regard, reference must be made to the opening remarks of the parliamentarian who tabled the Bill, who referred to the proposed liability to be created upon the issuer of the cheque. Pertinently, a reference is made only to section 138 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 of legislation. 27. A reference can be made to the pronouncement of the apex court in Keshavji Ravji and Co and Ors. vs. Commissioner of Income Tax [(1990) 2 SCC 231]. In this case, the question was whether gross interest payment should be deducted rather than net interest payment made by the partnership firm to its partners. Justice Venkatachaliah, writing for a bench of three judges, gave the following observations, which are not fact-specific but of a general expository nature: 11. ...Section 40(b), it is true, seeks to prevent the evasion of tax by diversion of the profits of a firm; by the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 compensation gets triggered- the stage is recording the plea. At this stage, Magistrate cannot go beyond the averments contained in the complaint. This test is analogous material to be considered by the magistrate at the stage of issuance of summons. At the stage of recording the plea, to get out of liability under section 143A, the onus of proof to show innocence would be on the drawer, which he may only satisfactorily discharge with leading evidence. Such a consequence might have weighed with the legislature while enacting the Amendment Act of 2018 by choosing not to employ words that could have created a vicarious liability under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords 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 the statute that is not provided for or permissible. 33. To interpret expression drawer to include authorised signatory who may be a shareholder or director it is necessary to refer to settled principles of company law which are relevant for adjudication of issues involved. The true legal position in regard to the character of a corporation or a company which owes its incorporation to a statutory authority, is that the entity of the corporation is entirely separate from that of its shareholders; it bears its own name and has a seal of its own; its assets are separate and distinct from those of its members; its creditors cannot obtain satisfaction from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 parliament of which the legislature is deemed to be fully aware of at the time of enacting section 143A and 148 of NI Act. The legislature enacted sections 143A and 148 in the year 2018 much after the legislature enacted the Insolvency and Bankruptcy Code, 2016 (IBC). Therefore, at the time of bringing section 143A into force, the legislature was aware that drawer companies could not be made to pay interim compensation in light of the moratorium imposed by section 14 of IBC on companies undergoing a corporate insolvency resolution process (CIRP). The legislature was also aware that there could be natural persons who may have drawn/issued the cheque but could not be made to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 be fulfilled by the 1956 amendment, the Constitution Bench has observed as under: 42. .Ordinarily, a word or expression used at several places in one enactment should be assigned the same meaning so as to avoid a head-on clash between two meanings assigned to the same word or expression occurring at two places in the same enactment. It should not be lightly assumed that Parliament had given with one hand what it took away with the other (see Principles of Statutory Interpretation, Justice G.P. Singh, 7th Edn. 1999, p. 113). That construction is to be rejected which will introduce uncertainty, friction or confusion into the working of the system (ibid, p. 119). W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 after it is 'proved' that offence has been committed with their consent or connivance of or is attributable to any neglect on the part of such persons. Power to direct interim compensation under section 143A is exercisable after recording a plea of the accused. Based on specific averments in the complaint and complying with ingredients of section 141(2), persons specified in sub-section (2) of section 141 can be proceeded against or punished. In the absence of specific power conferred under section 141, the Court cannot direct persons other than 'drawer' to pay interim compensation, particularly when section 143(A) confers such specific power on the Courts to direct payment of interim compensation. Such interpretation gets support from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udges 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 a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden, applied to judicial officers making a record under Section 164 and, therefore, held that the Magistrate could not give oral evidence of the confession made to him which he had purported to record under Section 164 of the Code. It was said that otherwise all the precautions and safeguards laid down in Sections 164 and 364, both of which had to be read together, would become of such trifling value as to be almost idle and that it would be an unnatural construction to hold that any other procedure was permitted than that which is laid down with such minute partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ada (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. Therefore the observations of the larger bench prevails. 43. Before I turn to the judgments of the Supreme Court, it is necessary to have clear idea as to what is a ratio which has a binding effect upon a Court. Every decision contains three basic postulates: (a) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (b) statements of the principles of law applicable to the legal problems disclosed by the facts; and (c) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. 46. In Aneeta Hada (Supra), the point for determination before the Supreme Court was whether a complaint under Section 138 read with Section 141 of the NI Act was maintainable against a Director or A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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. Harihara (supra), it is clear that the subsequent bench of the Apex Court, after noticing and relying on Aneeta Hada (supra), has observed that every person signing a cheque on behalf of a company on whose account a cheque is drawn does not become the drawer of the cheque and such signatory is only a person duly authorized to sign the cheque on behalf of the company/drawer of the cheque, the Apex Court has made these observations after noticing and relying on Aneeta Hada (supra) would be binding on this Court. Therefore respondents' submission of including authorized signatory within the expression drawer under sections 143A and 148 of the Negotiable Instruments Act, 1881 cannot be accepted. 49. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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