Company’s authorized signatory of cheque is not drawer in terms of Sec. 143A of the Negotiable Instruments Act, 1881 and cannot be directed to pay interim compensation u/s 143A & A deposit of a minimum sum of 20% of the fine or compensation is not necessary in an appeal u/s 148 filed by persons other than “drawer”, however, power to direct such deposit is available u/s 389 of CrPC – Lyka Labs Ltd. & Anr. Vs. The State of Maharashtra & Anr. – Bombay High Court

In this case, questions of law before the Hon’ble High Court are (i) Whether the signatory of the cheque, authorized by the Company, is the “drawer” and whether such signatory could be directed to pay interim compensation in terms of section 143A of the Negotiable Instruments Act, 1881 (NI Act) living aside the company.
(ii) Whether a deposit of a minimum sum of 20% of the fine or compensation is necessary under Section 148 of NI Act in an appeal filed by persons other than “drawer” against the conviction and sentence under section 138 of the NI Act.
Hon’ble High Court held that:
(i) The signatory of the cheque, authorized by the “Company”, is not the drawer in terms of section 143A of the NI Act and cannot be directed to pay interim compensation under section 143A. (ii) In an appeal under section 148 of NI Act filed by persons other than “drawer” against the conviction under section 138 of the NI Act, a deposit of a minimum sum of 20% of the fine or compensation is not necessary. (iii) However, in an appeal filed by persons other than “drawer” against the conviction under section 138 of the NI Act such power to direct deposit of compensation is available with the Appellate Court while suspending sentence under section 389 of code of criminal procedure.

Company’s authorized signatory of cheque is not drawer in terms of Sec. 143A of the Negotiable Instruments Act, 1881 and cannot be directed to pay interim compensation u/s 143A & A deposit of a minimum sum of 20% of the fine or compensation is not necessary in an appeal u/s 148 filed by persons other than “drawer”, however, power to direct such deposit is available u/s 389 of CrPC – Lyka Labs Ltd. & Anr. Vs. The State of Maharashtra & Anr. – Bombay High Court Read Post »