Auth to sign cheques

It requires power of authority.

Power  of authority to sign on cheque can be delegated as per law and the same has been suggested by Mr.Rajoo.

1.  IF it is a prop. firm or a partnership firm, THEN a simple letter to the Bank authorising XYZ to sign on your behalf is sufficient enough, BUT signature of XYZ should be endorsed in the specimen signature card held in the bank alongwith respective photographs and forms.

2.  IF it is a company (registered under the Companies Act) then a BOD resolution is necessary authorising xyz to sign on behalf of the Directors.  Such BOD resolution has then to be lodged with the Bank for rest of the bank procedures (specimen signatures, photographs, etc....)

3.  However in case of cheque bounce the owner of the account will still be held liable under the N.I.Act.

4.  Contrary to what other members have described above, a "power of authority ?"  or a "power of attorney" is not necessary for the purposes.

Keep Smiling .... Hemant Agarwal
 

A power of authority will be enough.

Mr. Hemant Agarwal, Thanx for the updates but do power of authority or authorising letter to bank has  a different meaning?

Please keep that spirit up to show your smartness by altering the words.

Once again a big thank you.

Regards.

Mr. Om Prakash Dhusia,

Keeping aside your chronic tendency of being an habitual taunter (as observed from your earlier various posts on this forum)  kindly introspect on the following :

Being an "HR assistant",   "YOU" could well become an "HR clerk",  IF YOU do not study once again the meaning of  "Authority"  and the meaning of "Authorising".   (pun intended)

In legal parlance "Authority" means an sanctioned official authority granted/given to govt. servants & public servants. Only an "Legal Authority" may  "irreversibly"  delegate his "powers" to his sub-authority for lawful enforcement purposes.  Eg. a Collector who is a Legal "Authority" may delegate his "power" to his deputy or assistant, for performance of his official duties, including signing on official documents.  Such  "Authority"  and sub-delegation of authority is determined by default, in the Law, as passed by the legislature.

In legal parlance, an ordinary citizen (i.e. NON govt. servants /public servants) may delegate his "reversible"  rights (and not powers)  ONLY & ONLY via a "power of attorney" i.e. to lawfully appoint a person (with consent or without consent) to perform acts on his behalf for general / specific purposes, as defined under the Power of Attorney Act.

The maker of the Power of Attorney does not have the "power"  and CANNOT order the power-of-attorney holder to perform /act on his behalf  AND NEITHER the Power of Attorney holder is bound by law to perform /act /honour the power of attorney given to him, whereas an "Power of Authority"  (i.e. govt. servants /public servants)  is mandatorily bound by Law to perform his delegated statutory authority, as defined in the Code of Conduct of Service Rules.

INFORMAL "power of authority" means say-so non-legitimate domination e.g.  self-exercised by schools,  HR personnels, politicians, the nefarious religious leaders and so on.  The law grants constitutional "Authority" to govt. servants /public servants.  The law assures constitutional "rights" to ordinary citizens BUT NO POWER OF AUTHORITY.

Further in case of registered Companies, the BOD has to mandatorily pass a resolution appointing another Director / Manager / others, as signing authority.  Here there is no such thing as "power of authority"    or a "power of attorney" and no court of law will accept such "power of authority"  or a "power of attorney" from companies, IF it is not a BOD passed resolution. 

Yet further, Banks are not bound to honour the "power of attorney" or the misconcieved "power of authority", unless and until the terms and conditions of the Banking norms are fulfilled i.e. signing on the signature specimen card (bank  form no. 6A), & other forms, by the account holder and/or other signatories.

Quote : "It requires a very unusual mind to undertake the analysis of the obvious"

Keep Smiling .... Hemant Agarwal

The proprietor can give a letter of mandate to the bank authorising a particular person, to operate the bank account, on behalf of the proprietor.

Mr. Hamant Agarwal, Thank you very much for being so nice (This is no pun please) to explain me the correct meaning of these two words.Really as a layman I was under the impression that there is no such difference between those Two words, hence the ourburst.Kindly accept my apologies.

For me this LCI is a learning platform and I would keep on doing that and enhancing my knowledge about many aspects of life in society.

As for HR assistant, actually I am an Boiler Engineer at Qatar Gas at Qatar and additionally I acquired this qualification of HR and for that matter I would be the worst CLERK to change my profession because I have no clerical skill either.This HR qualification was mentioned during REGISTRATION in this coulmn because I found it to be correct at that time.

I am very glad to hear that intellectual people like you follow my comments but I must add that there are people when if shown mirror treat this to be TAUNT because for that matter if a lawyer doen't know the difference between CrPC 156(3),cognigible and non-coglnigible complaint or doesn't own responsibilities of his wrongdoings, do not submit the correct answers to the queries and still claim been doing a volunteer service, support English to be a national language, submit ONE LINER reply, treats him to be superior than others, then it hurts me and I write what I feel and surely I don't mean insulting anybody.

As for criminal law is concerned I have study the law thoroughly and struggled to fight case of my son who was falsely implicated and convicted u/s 364 IPC and the reason to join this column to get solace though I did get nothing in return from this column but despite being so I have become addicted to LCI where I found that majority of the population is tolerable.

I do support this column wholehaeratedly but  with apology to each individual never to the LAWYER fraternity at all because for the last many months I did not see any suggestions tendered by them could be treated a complete solution.

Thanks once again for contributing your knowledge/GYAN with me.

Regards.

if a HR assistant can opine on banking matters, being a banker, i should opine too:)

i fully agree with hemant agarwal on the matter. frankly, i have never heard of 'power of authority' in my 11 yrs in banking. there is no fixed document for this, but i think in most banks power of attorney will not be needed. a simple authorisation letter/mandate to the bank, attesting the signature of the authorised signatory, should be enough. Pls ensure that the person so authorised do not use "for XYZ .. Proprietor" stamp. he should use "for xyz...authorised signatory" or "per pro..." stamp.

dhusia vs hemant was good while it lasted .. chill guys .. friends do fight between each other right??

small correction on my post above: "Per Pro .. S/d Constituted Attorney" stamp should be used ONLY in power of attorney cases, and NOT for mandate/letter of authority cases.

1.  IF it is a prop. firm or a partnership firm, THEN a simple letter to the Bank authorising XYZ to sign on your behalf is sufficient enough, BUT signature of XYZ should be endorsed in the specimen signature card held in the bank alongwith respective photographs and forms.

2.  IF it is a company (registered under the Companies Act) then a BOD resolution is necessary authorising xyz to sign on behalf of the Directors.  Such BOD resolution has then to be lodged with the Bank for rest of the bank procedures (specimen signatures, photographs, etc....)

3.  However in case of cheque bounce the owner of the account will still be held liable under the N.I.Act.

4.  Contrary to what other members have described above, a "power of authority ?"  or a "power of attorney" is not necessary for the purposes.

Keep Smiling .... Hemant Agarwal

I agree with the opinio of Shri Hemant Aggarwal reproduced above. I am Retired Sr. Manager of a bank
 

Hi sir,

What if the cheque bouncing in this case? the person is only authorised signatory and there is a sign of the director on the cheque as well?

rgds,

Suhaas

Dear Experts,

As stated, a letter to the bank for authorising XYZ to sign cheques on his behalf as a Proprietor of the concern is acceptable.  But in case of a Partnership Firm, will the same procedure be accepted by the bank - when only ONE of the Partner signs the letter and attest the XYZ's signature without the other Partners knowledge / consent.  The Partnership Deed clearly mentions against such an act.  Does the banking norms permits them to file the Form 6A and send the same for digital scanning.  

Kindly share your views and thanks in advance.

Regards

Chandran Baloo