Section 138 cheque dishonour liability requires notice to the actual drawer; a separate company cannot be prosecuted for a firm's cheque.

For an offence under Section 138 of the Negotiable Instruments Act, prosecution must be based on service of the mandatory statutory notice on, and arraignment of, the actual drawer of the dishonoured cheque. Where the cheque was issued by a partnership firm, notice had to be addressed to the firm, and liability under Section 141 could be pursued only against persons connected with that drawer entity in law. A private limited company is a separate legal entity from the firm, and the fact that an individual was both a partner of the firm and a director of the company did not justify criminal liability against the company or its directors. In the absence of notice to the firm, the complaint could not be sustained.

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Issues: Whether process under Section 138 of the Negotiable Instruments Act, 1881 could be sustained against a private limited company and its directors when the cheque was issued by a partnership firm, the firm was not arraigned as an accused, and no statutory notice was issued to the firm.

Analysis: Liability under Section 138 arises only against the drawer of the dishonoured cheque after service of the mandatory statutory notice. Where the cheque is issued by a partnership firm, notice must be addressed to the firm as the drawer and, where Section 141 is invoked, the persons sought to be proceeded against must be connected with that drawer entity in the manner recognised by law. A company is a distinct legal entity from a partnership firm, and the mere fact that one individual is both a partner of the firm and a director of the company does not permit fastening criminal liability on the company for a cheque issued by the firm. In the absence of notice to the firm, the complaint could not be sustained against the company or its directors.

Conclusion: The order issuing process was rightly held unsustainable, and the challenge to the revisional order failed.

Ratio Decidendi: For an offence under Section 138 of the Negotiable Instruments Act, 1881, prosecution must be founded on notice to and arraignment of the actual drawer of the cheque, and criminal liability cannot be transferred to a distinct legal entity that was not the drawer.

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