Cheque dishonour liability applies only to the drawer or signatory; complaint against a non-signatory was quashed.

Section 138 liability attaches only to the drawer of the cheque or the person whose account it is drawn on, and criminal process cannot be used to fasten statutory liability on a non-drawer or non-signatory. Applying strict construction of penal and quasi-criminal provisions, the HC noted that the cheque was signed and issued by another accused, not by the petitioner, even though the underlying transaction involved the petitioner. On that admitted position, the petitioner was held not liable under Section 138, and the complaint proceedings against him were quashed under Section 482 CrPC.

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Issues: Whether a person who is not the drawer or signatory of the cheque can be proceeded against under Section 138 of the Negotiable Instruments Act, 1881, and whether the criminal complaint against such person deserved to be quashed under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: Liability under Section 138 attaches to the person who draws the cheque on an account maintained by him for discharge of a debt or other liability. Criminal and quasi-criminal provisions must be strictly construed, and proceedings cannot be used to fasten liability on a person who is not statutorily liable. On the admitted facts, the cheque was drawn and signed by the other accused, not by the petitioner, even though the underlying transaction related to the petitioner.

Conclusion: The petitioner was not liable under Section 138 of the Negotiable Instruments Act, 1881, and the complaint proceedings against the petitioner were quashed.

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