NEW DELHI: The Delhi High Court has observed that merely being a signatory of a cheque does not make a person guilty of the offence under the law while staying criminal proceedings against a retired official who signed a cheque during his service of which later connected to a dishonour of cheque case.
Justice Anup Jairam Bhambhani said that though the petitioner co-signed the cheques in question, he retired from the company more than 9 months before the cheques came to be presented.
The court, underlining the absence of the petitioner in the crime, said, “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 Negotiable Instruments Act.”
It added that 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.
The petitioner’s counsel submitted that the cheques were presented for encashment and returned for insufficient funds on October 25, 2018.
Accordingly, the court stayed the proceedings against him, saying the deeming provision contained in section 141 NI Act would not apply to the petitioner, since he was no longer in charge of the affairs of the respondent company on the date that the offence defined in section 138 was committed. Accordingly, the matter was further posted on March 29.