AIROnline 2024 SC 866

(A) Negotiable Instruments Act (26 of 1881) , S.138, S.7— Dishonour of cheque – Authorized signatory – Whether drawer of cheque – Authorisation to sign the cheques does not render authorised signatory as the drawer of those cheques
AIROnline 2024 SC 859-FollowedAIR 2017 SC 4125-Followed.

The act of maintaining an account is exclusively tied to the account holder and does not extend to any third party whom the account holder may authorize to manage the account on its behalf. Therefore, any delegation of authority to manage the account does not alter the intrinsic relationship existing between the account holder and the banker as envisaged under the NI Act. Corporate persons like companies, which are mere legal entities and have no soul, mind or limb to work physically, discharge their functions through some human agency recognised under the law to work. Therefore, if some function is discharged by such human agency for and on behalf of the company it would be an act of the company and not attributable to such human agent. One such instance of discharge of functions could be the authority to manage the bank accounts of the company, issue and sign cheques on its behalf, etc. which may be delegated to an authorised signatory. However, such authorisation would not render the authorised signatory as the maker of those cheques. It is the company alon….