The High Court has observed that three categories of persons can be brought under legal proceedings in cheque dishonour cases filed under Section 138 of the Negotiable Instruments Act if the drawer of the cheque is a company.
The HC bench of Justice Jahangir Hossain and Justice Md Badruzzaman passed the observation in the full text of a verdict, relying upon an apex court verdict.
The HC bench delivered the short verdict on March 18 in 2021, while the full text of verdict was released on the website of Supreme Court recently.
According to the HC observation, among the three categories of persons, the first category is the company that committed the offence; the second category is every person who was in charge of and responsible for the business of the company at the time of the offence; and the third category is any other person who is a director, manager, secretary, or officer of the company, with whose connivance or neglect the company has committed the offence. The verdict said that if the drawer of the cheque is a company, firm or an association of individuals, they will also be prosecuted for the commission of an offence under Section 138.
Referring to the apex court’s verdict, the HC bench also said three categories of persons were to be brought within the ambit of Section 138 through the legal fiction envisaged therein. It further said that when a cheque is issued by the company and the same is dishonoured, there is no doubt that the company is the principal offender under Section, but that alone does not mean that it is solely liable for the offence.
The other two categories of persons are also similarly liable for the same offence. When such an offence was committed by the company alone, the other two categories of persons can also be prosecuted and punished if arraigned in the category as accused.
According to the verdict, National Finance Limited filed a cheque dishonour case against a company named Ibrahim Raihana Industries Limited, its managing director, and four other directors with a Dhaka court.
Earlier, Ibrahim Raihana Industries Limited took a loan. However, they failed to repay the loan money within the stipulated time.
Then the managing director of Ibrahim Raihana Industries Limited, only on behalf of the company, issued a cheque of Tk 150 million on May 29 in 2017 in favour of the complainant. However, the cheque was bounced twice. The complainant then sent a legal notice on July 11 in 2017, requesting the borrowers to pay the cheque amount within 30 days. But they did not make payment within the stipulated period, and accordingly, the complaint was made for prosecution.
Then a Dhaka court framed charges against the accused persons. The directors moved the High Court for quashing the entire proceeding of the case. Upon the primary hearing on the case, the HC bench issued a rule and stayed the proceedings of the trial court. After the final hearing, the HC bench discharged the rule, vacated the stay order, and asked the trial court to proceed with the case.
