Mismatch of Signature can constitute offence under Section 138 of the Negotiable Instruments Act- Supreme Court
The Supreme Court of India (the “Supreme Court”) in its recent judgment in the case of M/s Laxmi Dyechem vs. State of Gujarat & Ors [1] has extended the ambit of Section 138 of Negotiable Instruments Act, 1881 (the “Act”) to dishonor of cheques due to mismatch of signature of drawer on the cheque with the specimen signature available with the bank.
Background:
One of the respondents in the case issued several cheques signed by its authorised signatory in favour of Laxmi Dyechem. Several of these cheques were dishonoured by the bank on the ground that the signatures on the cheques were incomplete or that the signatures of the drawer did not match the specimen signatures available with the bank. The cheques remained unpaid despite noticebeing served upon the respondents under Section 138 of the Act. The trial court took cognizance of the matter and one of the signatories of the cheque filed a Special Criminal Application before the Gujarat High Court (the “High Court”).
