Delhi HC: Merely Signing Cheque Does Not Amount to Offence u/s 138 NI Act

Delhi High court National Emblem senior Citizens

Aastha Thakur

Published on: 21 December 2022 at 23:37 IST

Delhi HC while hearing the matter relating to Section 138 of the NI Act ruled that merely signing the cheque cannot make one guilty.

Justice Anup Jairam Bhambhani held that, “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 bench was hearing the petition challenging a summon order dated September 19, 2019 passed by the MM in a complaint case registered under Section 138 of NI Act.

The case of petitioner was that he was one of the signatories to the cheques, issued on behalf of a company namely M/s. Ortel Communication Ltd. The petitioner was employed as Chief Technology Officer, at time of signing cheque.

The cheque was submitted way after when he resigned from his post. Therefore, he cannot be made liable for offence merely for being a signatory party.

It was submitted by plaintiff counsel that he was not involved with company and is retired more than nine months earlier.

The court reviewed the Section 138 NI Act, the genesis of an offence is the “return” of a cheque by a bank “unpaid” for insufficiency of funds in the account on which the cheque is drawn.

Justice Bhambhani stayed the proceedings in a criminal complaint filed against petitioner and listed the matter for hearing next in March 29, 2023.

Related Post