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S.138 NI Act - necessary party

(Querist) 20 August 2008 This query is : Resolved 
A cheque, signed and delivered by a person as authorised signatory of a proprietorship firm.

proceeding U/S 138 NI Act, pending,

During proceeding the fact that actual proprietor is someone else, came into the knowledge of complainant.

Is it necessary to implead the actual proprietor as necessary party?
Srinivas.B.S.S.T (Expert) 20 August 2008
Contract Act Agent and Principal. If a person has given a power of Authorised Signatory his acts are binding upon the Proprietor. What is the reason for dishonour of Cheque? is it for want of sufficient funds or singature didnot tallied???
KANDE VENKATESH GUPTA (Expert) 20 August 2008
Mr.Saxena, Please give the true brief facts leading to file the complaint so that advice can be given in a proper manner. Except the signatory to the cheque or any other person with whose knowledge and consent the cheque in question is issued, no other person is liable to be prosecuted under the N.I.Act. Even for that, you must allege the role played by each of the accused. You cannot implead any third party to the cheque,in the complaint already instituted against the other person. Under the N.I. Act, it is mandatory to issue the statutory notice to the proposed accused before launching prosecution informing and demanding payment of the money. The original proprietor is not a necessary party. As you came to know that the person who issued the cheque is not the proprietor, you have to prosecute him for the offence of cheating by dealinig with you pretending to be the proprietor of the firm.
anantha krishna n.v. Advocate (Expert) 20 August 2008
forget about rest of the information. First of all your proposed party is not put on notice within the mandatory period of 30 days from the date of knowledge of dishonour. So you cannot maintain the complaint against such a person.

anantha krishna n.v. (Advocate AP High Court, Hyderabad, ananthcourt@rediffmail.com, 9246531895)
Srinivas.B.S.S.T (Expert) 20 August 2008
Dear Sirs what if the cheque is not returned by an endorsement by the bank that the sinature is not tallied? and if the person who signed the cheque is a person authorised to maintain the account?
KamalNayanSaxena (Querist) 21 August 2008
Dear Friends,
Thanks a lot to all of you for your keen involvement in the matter.

I am sorry that I explained my query so briefly, now I explain;

The cheque was issued against a debt and dishonoured due to insufficient funds.

The person against whome the proceeding under S.138 were instituted was the manager of that proprietorship firm, and may be presumed as he was working on behalf and with the consent of the true owner, but now he is no more in that firm, neither he has sufficient resources for repayment of the cheque amount, hence the exercise against him shall be futile.

Now I want to build a pressure against the true owner to recover the cheque amount, but on other hand I also avoid Civil proceeding to save the court fees.

Now my query is, how the actual owner may be dragged into the proceeding U/s.138 NI Act.
KamalNayanSaxena (Querist) 21 August 2008
Now my query is, how the actual owner may be dragged into the proceeding U/s.138 NI Act?
Srinivas.B.S.S.T (Expert) 21 August 2008
Sir still you have not disclosed the endorsement with which the cheque has been returned and in what capacity the present accused signed on the cheque?
KamalNayanSaxena (Querist) 22 August 2008
Sir
Cheque was returned with the endorsement "funds insufficient".

Present accused signed the cheque with the seal of proprietorship firm, where his capacity is mentioned as authorised signatory.
H. S. Thukral (Expert) 22 August 2008
You donot have to implead the owner. Continue proceedings against the authorised signatory.
Srinivas.B.S.S.T (Expert) 23 August 2008
Sir have you shown the firm as one of the accused?


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