Non-signatory liability under cheque dishonour law fails absent clear averments of authorised issuance on behalf of the accused.

Section 138 of the Negotiable Instruments Act fastens criminal liability only on the drawer and signatory of the cheque. Where the cheque was signed by a third person and the petitioners were non-signatories, and there was no clear averment of authority to sign on their behalf, the foundational requirement for prosecution was not met. The Court noted that a proprietorship has no separate legal entity and proceedings may lie against the sole proprietor, but that principle does not extend criminal liability to a non-signatory without legally sufficient pleadings. The summoning orders were therefore set aside.

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Issues: Whether persons who are not signatories to the dishonoured cheque can be summoned for an offence under Section 138 of the Negotiable Instruments Act, 1881 when the cheque is alleged to have been issued on behalf of a proprietorship concern.

Analysis: Section 138 fastens criminal liability on the drawer of the cheque, and prosecution under that provision is maintainable against the person who has drawn and signed the cheque. Where the cheque is admittedly signed by a third person and not by the petitioners, and there is no clear assertion that such person was authorised to sign on behalf of the petitioners, the foundational requirement for fastening liability under Section 138 is not met. The Court also noted that while a proprietorship has no separate legal entity and proceedings may lie against the sole proprietor, that principle does not extend liability to a non-signatory in the absence of legally sufficient averments. Any civil liability, if otherwise available, was distinguished from criminal prosecution under Section 138.

Conclusion: The petitioners, being non-signatories to the cheques, could not be summoned under Section 138 of the Negotiable Instruments Act, 1881, and the summoning orders were set aside.

Ratio Decidendi: Criminal liability under Section 138 of the Negotiable Instruments Act, 1881 can be fastened only on the drawer and signatory of the cheque, and a non-signatory cannot be prosecuted absent legally sufficient averments of authorised issuance on its behalf.

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