SC: Mismatch of signature in cheque may lead to criminal action

A person may face criminal proceedings if a cheque issued by him gets dishonoured on the ground that his signature does not match the specimen signature available with the bank, the Supreme Court has said.

A bench of justices T S Thakur and Gyan Sudha Mishra set aside the verdict of Gujarat High Court that had held that criminal proceedings for dishonouring of cheque can be initiated only when the cheque is dishonoured because of lack of sufficient amount in the bank account and not in case where a cheque is returned due to mismatch of signature of the account holder.

Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138 of Negotiable Instrument Act, so also dishonour on the ground that the signatures do not match or that the image is not found, which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act, the bench said.

The apex court, however, said that in such cases of dishonouring of cheques, the account holder must be given a notice and an opportunity to arrange the payments before initiation of criminal proceedings against him.

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