Statutory notice under cheque-dishonour law was valid when served on the company's director-signatory and the company was also accused.

In a prosecution under Section 138 of the Negotiable Instruments Act, notice addressed to the company's director/signatory in that capacity satisfied the statutory requirement of notice to the drawer because the company was also impleaded as an accused and the cheques were issued on its behalf. The Court held that proviso (b) is meant to give the drawer an opportunity to pay and avoid penal consequences, and that purpose was met on the facts. Earlier decisions cited by the petitioners were distinguished as cases where the company itself had not been arraigned. The demand notice was therefore sufficient, the complaints remained maintainable, and quashing was refused.

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Issues: Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, service of the statutory demand notice on the director/signatory of the accused company, instead of the company itself, satisfies the requirement of notice to the drawer and preserves the maintainability of the complaint.

Analysis: Proviso (b) to Section 138 requires a written demand notice to be given to the drawer of the cheque, the object being to afford an opportunity to make payment and avoid penal consequences. The settled law recognises that where a cheque is issued by a company through its director/signatory, notice addressed to that director/signatory in that capacity can amount to valid notice to the company, especially when the company is impleaded as an accused and the drawer was aware of the liability. The earlier decisions relied upon by the petitioners did not assist them because they dealt with complaints that omitted the company altogether. In the present case, the company was arraigned as an accused, the cheques were signed by the second petitioner on behalf of the company, and the statutory purpose of notice stood satisfied.

Conclusion: The demand notice was held to be sufficient and the complaints were maintainable; quashing was refused.

Final Conclusion: The petitions failed because no ground was made out to terminate the cheque-dishonour complaints at the threshold, and the parties were left to contest the matter before the trial court.

Ratio Decidendi: In a prosecution based on a company cheque, notice to the company's director/signatory in that capacity satisfies the statutory requirement of notice to the drawer when the company is also impleaded and the director had acted for the company in issuing the cheque.

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