Mismatch of signatures on the cheque would amount to criminal proceedings: SC

Supreme Court set aside the verdict of Gujarat High Court in which it said that the criminal proceedings for dishonouring cheque would start off only in case the cheque is dishonoured because of insufficient amount in the account.

The Supreme Court said that the criminal proceedings would also be initiated in case the cheque issued by a person gets dishonoured on the basis that signature is not matching with the specimen signature that bank has.

The Gujarat High Court had said that there would be cheque dishonouring only in case of lack of sufficient balance in the account and not when the signature mismatches.

The bench of the Apex Court said that there would be dishonour of cheque in case the signatures do not match, referring to the meaning of Section 138 of the Negotiable Instrument Act.

However, the Supreme Court said in cases like these, the person would be provided with a chance for arrangement of the payment before the criminal proceedings start.