Cheque dishonour under Section 138 requires statutory grounds; missing signatures and company seal were not enough.

Criminal liability under section 138 of the Negotiable Instruments Act arises only when the cheque is dishonoured for the statutory reasons of insufficiency of funds or the amount exceeding the bank arrangement. A cheque returned because it lacked the managing director's joint signature and the company seal did not satisfy those ingredients, so no offence under section 138 was disclosed on the complaint as pleaded. The Magistrate was therefore not justified in issuing process, and the proceedings against the accused were quashed.

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Issues: Whether criminal proceedings under section 138 of the Negotiable Instruments Act, 1881 could be sustained when the cheque was returned not for insufficiency of funds or excess over arrangement, but because it lacked the required joint signatures and company seal.

Analysis: Section 138 is attracted only where the cheque is dishonoured for the statutory reasons contemplated by that provision, namely insufficiency of funds or the amount exceeding the arrangement with the bank. A dishonour on the ground that the cheque did not bear the signature of the managing director and did not contain the company seal did not satisfy those statutory ingredients. On the facts alleged in the complaint, no case was disclosed to proceed against the petitioner, and the Magistrate was not justified in issuing process.

Conclusion: The petition was allowed and the proceedings against the petitioner were quashed.

Ratio Decidendi: Criminal liability under section 138 arises only when the cheque is dishonoured on a ground that falls within the statutory ingredients of that provision.

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