Cheque dishonour for signature mismatch can still trigger criminal liability, with rebuttal of liability reserved for trial.

Dishonour of a cheque for signature mismatch, incomplete signature, or no image found can still attract Section 138 of the Negotiable Instruments Act because the provision covers situations where the drawer's act prevents payment from the account, including mandate changes and other forms of effective dishonour. The statutory presumption under Section 139 supports the cheque holder, subject to rebuttal at trial by showing no liability or another valid defence. Proceedings against a company and its authorised signatory are not ordinarily quashed at the threshold under Section 482 CrPC where disputed questions about the debt or alleged settlement require evidence, and the matter must proceed to trial.

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Issues: (i) Whether dishonour of cheques on the grounds of signature mismatch, incomplete signature, or no image found attracts Section 138 of the Negotiable Instruments Act, 1881. (ii) Whether the proceedings against the company and its authorised signatory could be quashed at the threshold under Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether dishonour of cheques on the grounds of signature mismatch, incomplete signature, or no image found attracts Section 138 of the Negotiable Instruments Act, 1881.

Analysis: Section 138 is not confined to the two contingencies expressly mentioned in its text in a narrow or literal sense so as to exclude all other forms of dishonour. The expression relating to insufficiency of funds is of wider import and covers cases where the drawer, by his own act, prevents the cheque from being honoured, including closure of account, stop-payment instructions, or substitution of signatures and mandate resulting in mismatch. The statutory presumption under Section 139 supports the holder of the cheque, and the drawer may rebut it at trial by showing absence of liability or other valid cause.

Conclusion: Yes. Dishonour for signature mismatch, incomplete signature, or no image found can attract Section 138, subject to rebuttal under Section 139.

Issue (ii): Whether the proceedings against the company and its authorised signatory could be quashed at the threshold under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The existence of a cheque issued by authorised signatories gives rise to a presumption of liability, and disputes about fraud, settlement of accounts, or the real nature of the debt require evidence and cannot ordinarily be decided in quashing proceedings. The authorised signatory who drew the cheque is also liable to be prosecuted with the company under Section 141, and the complainant was entitled to proceed to trial.

Conclusion: No. Quashing was not justified and the complaints were required to proceed to trial.

Final Conclusion: The appeals succeeded, the High Court orders quashing the complaints were set aside, and the complaints were restored for trial on merits without any final opinion on liability.

Ratio Decidendi: Dishonour of a cheque for reasons that, in substance, prevent payment from the drawer's account falls within Section 138, and the drawer may escape criminal liability only by rebutting the statutory presumption under Section 139 at trial.

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