Manager Of Firm Cannot Prosecute U/S 138 NI Act In Personal Capacity If 'Payee' Of Cheque Is Firm: Kerala High Court

In a case under Section 138 of the Negotiable Instruments Act, the Kerala High Court has clarified the position on the prosecution of a firm's manager. The court held that a manager can be prosecuted for a cheque bounce offense committed by the company, but only if the cheque was issued to the payee in their personal capacity, not to the firm. The case involved a cheque that was issued by the firm but was made out to an individual who was also the manager of the payee firm. The court ruled that since the individual was the "payee" in their own right, they could maintain a complaint against the drawer firm and its responsible officers. This judgment provides an important clarification on the locus standi to file a cheque bounce complaint when the payee is an individual who also holds a managerial position in a company.