Delhi High Court rules on complaint notice under Negotiable Instruments Act
It failed to find any illegality in the impugned order passed by the Additional Sessions Judge
Delhi High Court rules on complaint notice under Negotiable Instruments Act
It failed to find any illegality in the impugned order passed by the Additional Sessions Judge
The Delhi High Court has held that if the company is the drawer of the cheque, a notice of complaint should be issued separately to the company as well as its members. This would initiate proceedings under the Negotiable Instrument Act (NIA), 1881.
The petitioner, Geeta Singh had filed a petition against the September 2017 impugned order and judgment passed by the Additional Sessions Judge (ASJ). In that, the revision petition was allowed, setting aside the order of summoning under the CrPC filed by the petitioner against the respondent.
The petitioner instituted a complaint under NIA, alleging that the respondent had taken a loan of Rs.99,00,000 from her, but had failed to pay the amount, as seven post-dated cheques amounting to Rs. 80,00,000, were dishonored.
It was alleged that ASJ committed an error by presuming that the cheque was issued to the accused company Shree Krishna Vanaspati Pvt Ltd while deciding on the revision petition. The respondent had, thus, avoided the trial initiated against him and the accused company. The respondent contended that the company was the drawer of the cheque and the petitioner failed to make it a party to the complaint in the proceedings under NIA.
It further stated that the company was the necessary party and a notice was not issued to it by law, whereas the cheque was signed by the respondent. The cheque issued to the petitioner bore the name of the accused company, as the account holder was a separate entity from its members.
The bench comprising Justice Chandra Dhari Singh held that the liability under NIA did not arise solely against the respondent even if he had signed the cheque. It observed that the company was made a party to the complaint without being furnished a notice and without being provided the opportunity to defend itself.