Signatory Of Cheque Not Personally Liable To Pay Compensation

INTRODUCTION

In a recent judgment, titled Bijay Agarwal v. M/s Medilines¹ the Hon'ble Supreme Court of India while reiterating that "authorized signatory" of cheque on behalf of a company is not a "drawer" of the cheque clarified that such signatory cannot be directed to deposit any sum under section 148 of The Negotiable Instruments Act, 1881 ("NI Act").

FACTS OF THE CASE

The Accused Company represented to be the Pan Indian circle licence holder for distribution of Electronic Pin Recharge BSNL. The Appellant is the authorised signatory and Director of the Accused Company. The Accused Company induced the Complainant Company to become the Master Distributor for BS recharge pin for Karnataka State by paying advance amount of Rs.1,00,00,000/-. Accordingly, the Complainant Company entered in agreement with the Accused Company on 01.10.2011. The Complainant Company later found out that 99% of the BSNL E-recharge pin supplied by the Accused Company are fake and the