Outcome of Reference to Larger Bench:

• Due to difference of opinion between the two judges on whether prosecution under Section 138 is maintainable against the authorised signatory without arraying the company as an accused, the matter was referred to a three-judge Bench for resolution; the Registry was directed to place the papers before the Chief Justice of India for appropriate orders. (!) (!) (!) (!) (!) (!) (!) (!) (!)

Note: The document records only the reference and does not contain the decision or proceedings of the three-judge Bench. (!) (!) (!) (!) (!) (!)

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CASE NO.:

Appeal (crl.) 838 of 2008

PETITIONER:

Aneeta Hada

RESPONDENT:

M/s Godfather Travels & Tours Pvt.Ltd.

DATE OF JUDGMENT: 08/05/2008

BENCH:

S.B. SINHA & V.S. Sirpurkar

JUDGMENT:

JUDGMENT

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 838 OF 2008

[Arising out of SLP (Crl.) No. 2094 of 2007]

Aneeta Hada ...Appellant

Versus

M/s. Godfather Travels and Tours Pvt. Ltd. ...Respondent

WITH

CRIMINAL APPEAL NO. 842 OF 2008

[Arising out of SLP (Crl.) No. 2117 of 2007]

JUDGMENT

S.B. SINHA, J :

1. Leave granted.

2. Appellant is said to be an authorised signatory of M/s. Intel Travels

Ltd (Company). The said Company as also the respondent company had

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business transactions. Appellant on behalf of the company issued a cheque

dated 17.1.2001 for a sum of Rs.5,10,000/- in favour of respondent which

was dishonoured. Respondent filed a complaint petition against the

appellant under Section 138 of the Negotiable Instruments Act, 1881 (’the

Act’ for short).

The Company which is a juristic person was not arrayed as an

accused.

The learned Magistrate took cognizance of the offence against her.

Respondent had not even served any notice upon the Company in terms of

Section 138 of the Act. It served a notice only on the appellant presumably

on the premise that she was in charge and responsible to the company for its

day to day affairs.

3. The High Court by reason of the impugned judgment refused to quash

the proceedings, as prayed for by the appellant, holding:

"This section does not say that the cheques should

have been drawn for the discharge of any debt or

other liability of the drawer towards the payee.

Even the Section 139 of the Negotiable

Instruments Act, by which a legal presumption is

created, the Parliament has only fixed the

presumption that the cheque was issued ’for the

dishcarge, in whole or in part, or any debt or other

liability.’ This would mean that the debt or other

liability includes the due from any other person. It

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is not necessary that the debt or liability should be

due from the drawer himself. It can be issued for

the discharges of any other man’s debt liability.

Legally enforceable debt or liability would have a

reference to the nature of the debt or liability and

not the person against whom the debt or liability

can be enforced. One has to go by the averments

in the complaint. The complainant has averred that

it is the petitioner who had purchased the tickets

from the complainant and the cheque in question

was given by them in discharge of their liability.

The demand notice dated 8.5.2001 is also sent to

the two petitioners and not to the company. What

the petitioners state here may be their defence."

4. A company being a body corporate is capable of suing and being sued

in its own name.

Section 7 of the Act defines "drawer" to mean the maker of a

bill of exchange or a cheque. The authorised signatory of a company does

not become the drawer of the cheque only because he has been authorised to

do so for the purpose of banking operations. Admittedly, the bank a