“Person Who Is Signatory Of The Cheque Is Clearly Responsible Under Sub-Section 2 Of Section 141 Of N.I. Act.”- Jharkhand HC

The Jharkhand High Court has observed that the person who is signatory of the cheque is clearly responsible under sub-section 2 of Section 141 of the Negotiable Instruments Act, 1881.

The Court was dealing with two cases involving common question of law. The two petitions were filed for quashing of entire criminal proceeding including order taking cognizance passed in a case pending before the Judicial Magistrate.

A Single Bench of Justice Sanjay Kumar Dwivedi held, “… the person who is signatory of the cheque is clearly responsible under sub-section 2 of Section 141 of N.I. Act. … In view of above and considering that cheque was presented earlier, the petitioner-Pramod Shankar Dayal resigned on 26.10.2003 much after presentation of resignation, the petitioners are the signatory of the cheque further considering two of the judgements relied by the learned counsel for the O.P. No.2 this is not a case of quashing the proceeding at this stage under section 482 of Cr.P.C. and further petitioner-Krishna Singh has not filed any Form 32 under the relevant provision of the Companies Act.”

Senior Advocate A.K. Kashyap represented the petitioner while Spl. P.P. Priya Shrestha and Advocate Rajeev Kr. Sinha represented the respondents.

In this case, a complaint case was filed alleging that the accused persons were the directors of Rudra Steel Private Limited and had taken a friendly loan of Rs. 11,90,000/- from the complainant. The accused persons issued a cheque for the said sum under their joint signature to the complainant. However, the said cheque when presented before the bank was returned as unpaid due to insufficient fund. The complainant then sent a legal notice to them calling upon them to pay the amount. Since the accused persons did not pay the amount within the stipulated period, the complainant filed the instant complaint.

The High Court in the above regard noted, “Looking into sub-section 2 of Section 141 of N.I. Act prima facie it appears that when the signature itself of these petitioners in the cheque they are deemed to be guilty of that offence and that can be only appreciated in trial. Further the petitioners have not disputed their signatures and the argument advanced by the learned senior counsel for the petitioners are required to be proved by leading evidence.”

The Court said that the cases of both the petitioners are identical in nature as the second petitioner was also the signatory of the cheque and late on resigned. It added that the entire criminal proceeding cannot be quashed.

“… both the petitions are dismissed. Interim order is vacated. Pending I.A, if any, stands dismissed. … It is open to the petitioners to take all the grounds in the trial and the trial will proceed in accordance with law without being prejudice to this order which is for the purpose of deciding the case under section 482 of Cr.P.C.”, clarified the Court.

Accordingly, the High Court dismissed the petitions.

Cause Title- Pramod Shankar Dayal v. The State of Jharkhand & Anr.

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