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Notice addressed to a director signatory of a cheque who has represented the drawer company: High Court of Calcutta

Notice addressed to a director signatory of a cheque who has represented the drawer company: High Court of Calcutta

 

Applying the aforesaid principle in the matter of giving notice under section 138 (b) of the act to the drawer, it can be safely construed that a notice addressed to a director/authorised signatory of a cheque who has represented the drawer company in the course of the transaction resulting in the issuance of the dishonoured cheque shall be deemed to be a notice issued upon the company itself as much as 5he knowledge of the said human agency of the notice may be attributed to the body corporate itself, by the high the high court of Calcutta, by the learned bench of Honourable Justice Joymalya Bagchi, in the case of M/s. Heena Marketing Pvt. Ltd. And Anr. V. Somnath Guin, C.R.A.N. 3420 of 2015.

FACTS

In this case the cheques were drawn by the petitioner company through its director/authorized signatory, Vijay Kumar Kanoria. The cheques upon being presented for payment were returned unpaid with the endorsement “insufficient fund in your account”. Thereupon the opposite party issued notices under Section 138(b) addressing it to Vijay Kumar Kanoria, son of Govind Prosad Kanoria, authorised signatory of Gena Marketing Pvt. Ltd. at the registered office of the company. In spite of receipt of such notices, no payment was made and the impugned prosecutions were lodged.

CONTENTION

Mr. Bhattacharjee, learned advocate appearing for the petitioners submitted that the notice under Section 138(b) of the Negotiable Instruments Act, 1881 is to be issued upon the drawer of the cheque. Admittedly, the petitioner no.1/company is the drawer of the cheque and notice being issued in the name of the petitioner no.2 does not comply with the aforesaid requirement of law. Hence the impugned prosecutions are liable to be quashed on such score.

Per contra, Mr. Sandipan Ganguly, learned advocate for the opposite party/complainant submitted that the notice was sent to the registered office of the company and although it bore the name of petitioner no.2, director/authorized signatory of the company, in effect, it was a notice to the company calling upon it to make payment in accordance with law to avoid penal liability. Both the parties relied on various authorities in support of their contentions.

 

JUDGEMENT

The court laid out that object of issuing notice indicating the factum of dishonour of the cheques is to give an opportunity to the drawer to make the payment within 15 days, so that it will not be necessary for the payee to proceed against in any criminal action, even though the bank dishonoured the cheques. Bearing in mind the object of issuance of such notice, it must be held that the notices cannot be construed in a narrow technical way without examining the substance of the matter. The learned bench upheld that the Managing Director of the company and the cheques in question had been signed by the petitioner. In the aforesaid premises, the court comes to the conclusion that the company committed error in recording a finding that there was no notice to the drawer of the cheque, as required under Section 138 of the Negotiable Instruments Act. The court is in opinion that after the cheques were dischonoured by the bank the payee had served due notice and yet there was failure on the part of the accused to pay the money, who had signed the cheques, as the Director of the company. The petitioner no.1 company had sufficient notice of dishonor of the cheques and had failed to make payment within the stipulated time and the impugned prosecutions are not liable to be quashed on such score.

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Judgement reviewed by – Rani Banerjee

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