SHRI GURUDATTA SUGARS MARKETING PVT. LTD. versus PRITHVIRAJ SAYAJIRAO DESHMUKH & ORS.

SHRI GURUDATTA SUGARS MARKETING PVT. LTD. versus PRITHVIRAJ SAYAJIRAO DESHMUKH & ORS.

The term 'drawer' in Section 143-A refers to the issuer of the cheque (the legal drawer, here the company); an authorised signatory does not become the drawer for purposes of Section 143-A and therefore cannot be directed to pay interim compensation under that provision; vicarious liability of officers arises only under Section 141 when its conditions are satisfied, and cannot be read into Section 143-A.

Parties
Appellant: Shri Gurudatta Sugars Marketing Pvt. Ltd.; Respondents: Prithviraj Sayajirao Deshmukh & Ors.
Jurisdiction
India
Judgment Date
24 July 2024
Procedural Posture
Criminal Appeal Nos. 3070 3071 of 2024 / Appeal Against High Court Judgment and Order Dated 08.03.2023 and 29.03.2023
Outcome
Appeals dismissed
Legal Topics
Section 138 NI Act, Section 141 NI Act, Section 143 a NI Act, Drawer (definition), Authorized Signatory of Company, Interim Compensation, Vicarious Liability in Criminal Law, Statutory Interpretation, Cirp/moratorium Under IBC
Negotiable Instruments Act, 1881 Code of Criminal Procedure, 1973 Insolvency and Bankruptcy Code, 2016 Company Law Section 138 NI Act Section 141 NI Act Section 143 a NI Act Drawer (definition) +5 more

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Parties

Shri Gurudatta Sugars Marketing Pvt. Ltd.

Appellant

Prithviraj Sayajirao Deshmukh & Ors.

Respondents

Procedural Posture

Criminal Appeal Nos. 3070 3071 of 2024 / Appeal Against High Court Judgment and Order Dated 08.03.2023 and 29.03.2023

Legal Issues

  1. 1 Whether the signatory of the cheque, authorized by the company, is the 'drawer' and whether such signatory can be directed to pay interim compensation under Section 143-A, NI Act leaving aside the company
  2. 2 Whether liability for interim compensation under Section 143-A can be imposed on directors/authorized signatories when the company (drawer) is under CIRP/moratorium
  3. 3 Extent to which Section 141 creates vicarious/criminal liability for officers of a company in cheque dishonour matters

Ratio Decidendi

The term 'drawer' in Section 143-A refers to the issuer of the cheque (the legal drawer, here the company); an authorised signatory does not become the drawer for purposes of Section 143-A and therefore cannot be directed to pay interim compensation under that provision; vicarious liability of officers arises only under Section 141 when its conditions are satisfied, and cannot be read into Section 143-A.

Court Disposition

Appeals dismissed

Orders

  • Appeals dismissed
  • High Court judgments and orders dated 08.03.2023 and 29.03.2023 upheld