Company cheque dishonour prosecutions require arraignment of the company and statutory notice before vicarious liability of directors can arise.

For a prosecution under Sections 138 and 142 of the Negotiable Instruments Act based on a company cheque, the company must be arraigned as the principal accused and statutory notice must be served on the drawer company. Vicarious liability under Section 141 can arise only when these foundational requirements are met and the complaint contains specific averments showing that the director or officer was in charge of the company's business at the relevant time. A person cannot be fastened with criminal liability merely because of prior office held. On these facts, the complaint was not maintainable and the proceedings were quashed.

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Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable against a director and chairman when the cheque is drawn on the company's account but the company is not arraigned as an accused, and no statutory demand notice is served on the drawer company.

Analysis: For prosecution under Sections 138 and 142 of the Negotiable Instruments Act, 1881, the statutory requirements are mandatory. Where the drawer is a company, the company is the principal accused and the notice contemplated by the proviso to Section 138 must be issued to the drawer company. Vicarious liability under Section 141 can arise only when the company itself is properly before the court, and the complaint must also contain the necessary averments showing how the persons arrayed are responsible for the conduct of the company's business. A director who is not shown to be in charge of the company's affairs at the relevant time cannot be fastened with criminal liability merely because of office held earlier. In the present case, the complaint proceeded on a cheque drawn from the company account, yet the company was not arraigned as an accused and the foundational statutory requirements were absent.

Conclusion: The complaint was not maintainable, and quashing was warranted in favour of the petitioner.

Final Conclusion: The criminal proceedings founded on the cheque dishonour complaint could not be sustained for non-compliance with the mandatory statutory requirements governing prosecution of a company and its officers.

Ratio Decidendi: In a cheque dishonour prosecution based on a company account, the company must be arraigned as an accused and statutory notice must be served on it; absent these foundational requirements, vicarious liability of directors or other officers cannot be invoked.

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