Petitioner held liable for dishonour of the cheque issued by her authorised signatory.

The instant Criminal Original Petition is to call for records in C.C. No. 109 of 2000 pending on the file of the Judicial Magistrate, No. I Erode and quash the same.

The respondent herein preferred a private complaint under Section 200 of the Code of Criminal Procedure before the learned Judicial Magistrate No. 1 Erode, alleging that the petitioner herein and her son had committed offence under Section 138 of the Negotiable Instruments Act. According to the respondent, the petitioner is the proprietrix of Sri Lakshmi Agencies and her son Poondevan is the mandate holder, who happened to be the authorized signatory of the petitioner. On 15-10-1999 Poondevan borrowed Rs. 5,00,000/- from the respondent-complainant on behalf of Sri Lakshmi Agencies, the concern run the petitioner herein and agreed to repay the sum with an interest at 24% p.a. within a period of 2.5 months. He gave a post dated cheque dated 31-12-1999 for Rs. 5,25,000/-. When the cheque was presented in the bank on 31-12-1999, it was returned with a memo endorsed insufficient funds on the same date. The respondent/complainant issued legal notice on 3-1-2000 to the petitioner and her son. The petitioner received the notice on 4-1-2000. Her son received the notice on 19-1-2000. The petitioner sent a reply on 7-1-2000 denying the liability. Her son has not sent any reply. Since no amount was forthcoming after expiry of the statutory period of fifteen days after receipt of the notice by the petitioner and her son, the respondent herein preferred the complaint. Now, the petitioner who happens to be the first accused has come forward with the instant Criminal Original Petition to quash the proceedings contending that she is not a signatory to the cheque and, therefore, she has not committed any offence and consequently, the proceeding against her under Section 138 of the Negotiable Instruments Act is illegal and should be quashed.

Heard both the sides. It is not in dispute that the petitioner is the proprietrix of the 'Sri Lakshmi Agencies' and the second accused before the learned Judicial Magistrate is her son. It is also not in dispute that her son is the mandate-holder and the authorized signatory. The respondent had pleaded so in the complaint and the petitioner had also not disputed these facts. In fact, in her reply dated 7-1-2000, the petitioner had admitted that her son is the authorized signatory.

The question is how far the act of authorized signatory would bind the petitioner. It is settled law that the drawer of the cheque is primarily liable if the cheque bounced. Some difficulty would arise when a complaint is preferred against a third person who is not a drawer of the cheque, but he is in some way connected with the issuance of the cheque. The petitioner admits that the second accused her son is her authorized signatory. Reference to Law Lexicon by P. Ramanatha Aiyar, 1997 Edition would go to show what is authorized signatory, which reads :-

"Authorise to empower; to give right or authority to act. To endow with authority or effective legal power, warrant or right. To permit a thing to be done in the future. It has a mandatory effect or meaning, implying a direction to act."

It is evident that the second accused, namely, the son of the petitioner has been given authority, a mandate, to sign on behalf of the petitioner. In other words, the petitioner is the principal and her son is the agent.

The learned Counsel for the petitioner submitted that the petitioner who is not the drawer of the cheque would not come within the purview of Section 138 of the Negotiable Instruments Act, because it would apply only to a drawer. In support of such contention, the learned Counsel has cited the decision rendered by Sudesh Kumar Sharma v. K. S. Selvamani, 1994 - 1 Mad LW (Cri) 337. That was a case where a complaint was preferred against the father and son alleging that the father was the proprietor of the concern and the son was an authorized signatory, that