Liability for dishonor of a cheque falls on authorized signatories under Section 138 and Section 141 of the N.I. Act, reinforcing that signatories are accountable even without specific allegations against them.

ORDER :

1. Above captioned seven petitions arise between the same parties and therefore they are heard together with the consent of the learned counsel appearing for the parties and disposed of by this common order.

2. Heard the learned counsel appearing for the parties.

3. The petitioner company had initiated seven separate proceedings before the Court of V Addl. Civil Judge & JMFC, Ballari against accused Nos.1 and 2 companies for the offence punishable under Section 138 of N.I. ACT. The allegation against the accused companies is that cheques issued by the said companies towards repayment of the amount due by the companies to the petitioner company for supply of coal were dishonoured and in spite of statutory notices issued to accused Nos.1 and 2 companies, amount covered under cheques in question was not repaid and therefore seven separate criminal cases were filed against accused Nos.1 and 2 companies for the offence punishable under Section 138 of N.I. ACT. In the said seven criminal cases registered before the Court of Magistrate in C.C. No. 1098/2015, C.C. No. 1096/2015, C.C. No. 1099/2015, C.C. No. 1101/2015, C.C. No. 1097/2015, C.C. No. 1100/2015, C.C. No. 1095/2015 separate applications were filed under Section 141 of N.I. ACT by the petitioner company with a prayer to implead respondent Nos.3 to 6 as parties to the criminal proceedings initiated against accused Nos.1 and 2 companies. The said applications were opposed by the propose respondents by filing objections and the trial Court vide the order impugned dated 29.07.2021 dismissed the applications, which were unsuccessfully challenged in Criminal Revision Petition No.130/2022, Criminal Revision Petition No.131/2022, Criminal Revision Petition No.132/2022, Criminal Revision Petition No.133/2022, Criminal Revision Petition No.134/2022, Criminal Revision Petition No.135/2022 and Criminal Revision Petition No.136/2022 before the Court of II Addl. District and Sessions Judge, Ballari. It is under these circumstances, the above captioned seven criminal petitions are filed before this Court.

4. Learned counsel for the petitioner submits that respondent No.3 is the authorized signatory of the companies and he is the sole signatory to the cheques in question, which were dishonoured by the drawee bank. Therefore, relief sought for in the applications filed under Section 141 of N.I. ACT would be restricted by the petitioner only as against respondent No.3. Insofar as other respondents who are the directors of the companies are concerned petitions are not pressed as against them.

5. Per contra, learned counsel appearing for respondent No.3 submits that, no separate notice was issued to respondent No.3 and therefore he cannot be prosecuted for the alleged offence. Respondent No.3 is not the drawee of the cheque in question and he has signed the cheques only as authorized signatory of the companies. The companies are already arrayed as accused in the criminal proceedings and therefore presence of respondent No.3 is not necessary. Accordingly, he prays to dismiss the petitions as against respondent No.3.

6. It is not in dispute that respondent No.3, is the sole signatory to the cheques in question, which were issued on behalf of accused Nos.1 and 2 companies in favour of the petitioner. Primary liability under Section 138 of N.I. ACT is on the drawer, who must ensure maintaining adequate funds in the bank account on which the cheques in question are drawn at the time the cheques are presented.

7. Section 141 of the N.I. ACT provides for criminal liability for dishonour of cheque committed by company. In the case of K.K. Ahuja vs. V.K. Vora and Another, (2009) 10 SCC 48, the Hon’ble Supreme Court after referring to the judgment of SMS Pharmaceuticals vs. Neeta Bhalla and Another, 2005 (8) SCC 89 has observed that signatory of a cheque which is dishonoured is clearly responsible for the act and his liability is covered under Section 141 (2) of N.I. ACT. Therefore, no specific averment