In Aneeta Hada v Godfather Travels & Tours (P) Ltd, the Supreme Court of India dealt with the issue of whether a company’s authorized signatory alone could be prosecuted in a cheque bounce case if a complainant chooses not to proceed against the organization.
The appellant, Hada, an authorized signatory of Intel Travels, issued a cheque to Godfather Travels on behalf of her company. The cheque was dishonoured leading Godfather Travels to file a complaint against Hada under section 138 of the Negotiable Instruments Act. Intel Travels was not considered an offender and the magistrate issued a notice to Hada alone.
Hada challenged the summons issued to her on the grounds that she was a mere signatory to the cheque, arguing that she alone could not be prosecuted since the financial instrument was issued on behalf of the company. Hada claimed that the owners of the company, not her, were liable for prosecution.
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The update of court judgments is compiled by Bhasin & Co, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
