An authorised signatory cannot be prosecuted under Section 138 of the Negotiable Instruments Act, 1881 for the dishonour of a cheque drawn on an account maintained by another person.

1. The second accused in C.C.No.493/2008 on the file of the learned Judicial Magistrate-II, Erode has come forward with the present petition under Section 482 Cr.P.C for quashing the said criminal proceedings so far as the petitioner is concerned.

2. The above said case, namely C.C.No.493/2008 was instituted on the file of the Judicial Magistrate-II, Erode against the wife of the petitioner herein (A1) and the petitioner herein(A2) for an alleged offence punishable under Section 138 r/w Section 142 of the Negotiable Instruments Act, 1881. The respondent herein preferred a private complaint on the file of the learned Judicial Magistrate-II, Erode against the wife of the petitioner herein and the petitioner herein arraying them as A1 and A2 respectively. It has been alleged in the complaint that the petitioner herein, being the authorised signatory of his wife, who is running a proprietary concern in the name and style of M/s.Darshini Fabrics, issued a cheque dated 21.06.2007 bearing No.439765 drawn on the account of the above said proprietary concern maintained with ING VYSYA bank for a sum of Rs.25,000/- in favour of the respondent herein for the discharge of a debt/liability. The further averment made in the complaint is that the cheque, when presented for collection, was returned with a dishonour note "funds insufficient"; that the petitioner and his wife, even after receiving the statutory notice, failed to make payment of the amount covered by the cheque as demanded in the notice and thereby committed the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.

3. The learned Judicial Magistrate-II, Erode took the complaint on file and registered it as C.C.No.493 of 2008 following the procedure prescribed for taking cognizance of the case on private complaint. The trial court has also issued process to the petitioner herein and his wife. No defect has been pointed out by the petitioner regarding the procedure adopted by the trial court in taking cognizance of the case. On the other hand, the decision made by the trial court to issue process to the petitioner (A2) is attacked based on the contention that the learned Judicial Magistrate did not apply his mind to the facts of the case properly and that no prosecution can be sustained against a person, who simply signed and issued a cheque on behalf of another as a mandate holder/authorised signatory. It has also been contended in the petition that the complaint was preferred after the statutory period was over. Thus the criminal proceedings initiated against the petitioner herein is sought to be quashed on the following two grounds:-

a) The complaint was preferred after statutory period prescribed in Section 138 of the Negotiable Instruments Act, 1881 was over.

b) The mandate holder authorised to sign the cheque on behalf of another, cannot be prosecuted for the simple reason that he signed the cheque on behalf of other person.

4. The arguments advanced by Mr.N.Manokaran, learned counsel for the petitioner and by Mr. C.S. Saravanan, learned counsel for the respondent were heard. The documents were also perused.

5. Though the petitioner hastaken a stand that the complaint has been lodged beyond the period of limitation as a ground for quashing the complaint, the learned counsel for the petitioner was fair enough to draw the attention of the court to the proviso to Section 142(b) which enables the court to take cognizance of the complaint even after the prescribed period, if the complainant satisfies the court that he had sufficient cause for not making a complaint within the prescribed period and submitted that he would confine his arguments with regard to the second contention alone.

6. Admittedly, the cheque in question was not drawn on an account maintained by the petitioner herein in a bank. On the other hand, the cheque in question was drawn on an account maintained by the wife of the petitioner, who is running a proprietary concern in