Mandatory demand notice to company drawer is essential; director liability under cheque dishonour law cannot stand without it.

Complaints under Section 138 of the Negotiable Instruments Act were held unsustainable where the cheque was drawn on a company account but the company was not served with the mandatory statutory demand notice and the complaint did not clearly aver that the company was the drawer. The company must be arraigned as the principal accused, and vicarious liability of directors under Section 141 arises only after the foundational requirements against the company are satisfied. An earlier order permitting impleadment of the company did not cure the absence of notice or the missing foundational averment. The complaints were therefore not maintainable against either the company or the individual accused.

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Issues: Whether the complaints under Section 138 of the Negotiable Instruments Act, 1881 were maintainable when the drawer company was not served with the statutory demand notice and the complaint did not contain a clear averment that the company was the drawer of the cheque.

Analysis: The statutory scheme requires prior demand notice to the drawer before institution of a prosecution under Section 138. Where the drawer is a company, the company is the principal offender and its arrayment as an accused is necessary. Vicarious liability of directors under Section 141 can arise only when the foundational requirements against the company are satisfied. A prior order permitting the complainant to implead the company did not decide, and could not override, the separate question whether the mandatory notice requirement had been fulfilled. The record showed that no statutory notice had been issued to the company, and the complaint and notice proceeded on the basis that the individual director was the drawer, leaving the necessary foundational averment absent.

Conclusion: The complaints were not maintainable against the company or the individual accused, and the acquittal recorded by the appellate court was upheld.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, where the cheque is drawn on a company account, the company must be arraigned as the principal accused and must receive the mandatory statutory demand notice; without these foundational requirements, vicarious liability of directors cannot be sustained.

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