Cheque dishonour as "referred to drawer" can attract Section 138, but notice, waiting period, and proper institution remain mandatory.

Endorsement of a cheque as "referred to the drawer" was treated as falling within Section 138 of the Negotiable Instruments Act, so that objection failed. However, criminal liability under Section 138 still depends on service of statutory notice, expiry of the prescribed fifteen-day waiting period, and institution of the complaint in a legally maintainable form. On the facts noted, the complaint was filed before the cause of action arose and was also presented by the power of attorney holder in his own name rather than in the payee's name, rendering it premature and improperly instituted. The complaint proceedings were therefore quashed.

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Issues: (i) whether dishonour of a cheque with the endorsement "referred to the drawer" attracts liability under Section 138 of the Negotiable Instruments Act, 1881; (ii) whether the complaint was premature for want of service of statutory notice and expiry of the prescribed waiting period; and (iii) whether a complaint under Section 138 can be maintained when filed by a power of attorney holder in his own name.

Issue (i): Whether dishonour of a cheque with the endorsement "referred to the drawer" attracts liability under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: Section 138 applies when a cheque is returned unpaid for insufficiency of funds or where it exceeds the arrangement with the bank. The dishonour reason "referred to the drawer" was treated as falling within the scope of Section 138 in the light of binding precedent, and the contrary view relied upon by the applicant was held not to prevail against the later three-judge bench authority.

Conclusion: The endorsement "referred to the drawer" does attract Section 138, so this objection failed.

Issue (ii): Whether the complaint was premature for want of service of statutory notice and expiry of the prescribed waiting period.

Analysis: A complaint under Section 138 can arise only after service of notice and expiry of fifteen days thereafter. As the complaint contained no specific averment of actual service, service by registered post was treated as giving rise at best to a presumed delivery within a reasonable time. On that basis, the complaint filed before the expiry of the notice period was held to be premature and no cause of action had arisen on the date of filing.

Conclusion: The complaint was premature and no offence under Section 138 was made out on the date of filing.

Issue (iii): Whether a complaint under Section 138 can be maintained when filed by a power of attorney holder in his own name.

Analysis: A power of attorney holder may initiate proceedings on behalf of the payee, but the complaint must be in the name of the payee or the proprietary concern, as recognised in the governing precedent. Since the complaint was filed by the attorney holder in his own name, it was not maintainable in the form presented.

Conclusion: The complaint was not maintainable in the name of the power of attorney holder.

Final Conclusion: The complaint proceedings were quashed because the complaint was premature and improperly instituted, even though the cheque dishonour ground under Section 138 was upheld as legally sufficient.

Ratio Decidendi: An endorsement such as "referred to the drawer" can fall within Section 138, but criminal liability under that provision arises only after valid statutory notice, expiry of the prescribed waiting period, and institution of the complaint in a legally maintainable form on behalf of the payee.

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