Vicarious liability under cheque dishonour law fails without arraigning the drawer company; prosecution against directors alone cannot stand.

Vicarious liability under Section 141 of the Negotiable Instruments Act arises only when the offence under Section 138 is committed by the company itself, and arraignment of that company as an accused is a necessary condition precedent for prosecuting its officers. Where the cheque was issued by a different legal entity and the accused were directors of another company with no connection to the drawer company, proceedings under Sections 138 and 141 could not be sustained. The prosecution against the appellants was therefore not maintainable and was quashed.

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Issues: Whether proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 could be maintained against the appellants when the cheque was issued by a different company and the company said to have issued the cheque was not arraigned as an accused, and whether such proceedings were liable to be quashed in exercise of jurisdiction under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The liability under Section 141 is vicarious and arises only when the offence under Section 138 is committed by the company itself. The arraignment of the company as an accused is imperative because the statute, on a strict construction, makes commission of the offence by the company an express condition precedent for fastening vicarious liability on its officers. Where the cheque is admittedly issued by another distinct legal entity and the appellants are directors of a different company with no connection to the drawer company, continuation of the prosecution against them alone cannot be sustained.

Conclusion: The proceedings against the appellants were not maintainable and were rightly quashed.

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