In cheque dishonour cases, signatory acting on behalf of Sole Proprietary Trading cannot be held liable under Section 141 NI Act: AP HC

The Andhra Pradesh High Court (AP HC), in a petition filed for quashing of criminal proceedings by taking the plea that the signatory of the cheque, acting on behalf of a sole proprietorship, cannot be made liable under Section 141 of the Negotiable Instruments Act, 1888, has held that, a sole proprietorship does not possess a separate legal identity on its own & is merely a business name of the proprietor. Therefore, the AP HC while noting that any reference made to proprietorship firm means and includes only the proprietor and not its employees, quashed the criminal proceedings against the signatory, who was an employee of the sole proprietor.