Adv. Akash Chikate

As a lawyer with experience in handling cheque bounce cases, I find the recent Bombay High Court decision on the liability of the company's authorized signatory under Section 143A of the Negotiable Instruments Act particularly noteworthy.

Section 143A of the Negotiable Instruments Act was introduced in 2018 to provide interim relief to the payee in cheque bounce cases. The provision allows the payee to claim interim compensation from the drawer of the cheque, even before the trial is completed.

In a recent decision, the Bombay High Court clarified that the authorized signatory of a company, who is not the drawer of the cheque, cannot be held liable to pay interim compensation under Section 143A. The court held that the authorized signatory of a company cannot be equated with the drawer of the cheque, even if they signed the cheque on behalf of the company.

The court observed that the provisions of Section 143A of the Negotiable Instruments Act do not impose any liability on the authorized signatory of a company who is not the drawer of the cheque. If the payee wants to claim interim compensation from the authorized signatory, they need to establish that the signatory had knowledge of the cheque's dishonor and had a role to play in its issuance.

This decision is significant as it provides clarity on the scope of Section 143A of the Negotiable Instruments Act and ensures that the authorized signatory of a company is not unfairly held liable for something that they have not done.

This decision by the Bombay High Court provides valuable guidance to lawyers and their clients on how to proceed in cheque bounce cases.

Section 18 of the 1989 Act has been enacted to take care of an inherent deterrence and to instil a sense of protection amongst the members of the Scheduled Castes and Scheduled Tribes. It is submitted that any dilution of the same would shake the very objective of the mechanism to prevent the offences of atrocities. The directions issued would cause a
miscarriage of justice even in deserving cases. With a view to object apprehended misuse of the law, no such direction can be issued. In case there is no prima facie case made out under the 1989 Act, anticipatory bail can be granted. The same was granted in the case in question also.

Bail is a matter of right, Jail an exception.

Nowadays, the prosecution agencies unnecessarily oppose the bail application of the accused on the ground that his presence in custody is necessary for making a search and recovery of documents in his/her presence.

However, The Supreme Court in Harsh Sawhney v. Union Territory, Chandigarh, rejected the plea of the prosecution on this ground and directed that the appellant shall appear for the interrogation by the police whenever reasonably required, subject to his/her right under Art. 20(3) of the Constitution.

Now it is the need of the time that the judicial authorities interpret the bail laws in a very systematic and effective manner by which no govt. can infringe the right of the personal liberty of any individual.