Cheque liability under Section 138 is confined to the drawer; mere delivery of the cheque does not attract criminal prosecution.
A person who merely handed over a cheque, without being the drawer, signatory, or a person shown to be in charge of the drawer company's business, could not be proceeded against under Section 138 of the Negotiable Instruments Act, 1881. The Delhi HC noted that liability under Section 138 lies with the drawer of the cheque, while Section 141 creates vicarious liability only for those responsible for the company's conduct at the relevant time. As the undisputed material did not satisfy these ingredients against the petitioner, the summoning order and consequential proceedings were quashed qua him.
Issues: Whether a person who merely handed over a cheque, but was neither the drawer nor the signatory of the cheque and was not shown to be in charge of the drawer company, could be summoned for an offence under Section 138 of the Negotiable Instruments Act, 1881.
Analysis: The complaint and the admitted facts showed that the cheque was issued from the account of a different company and was signed by its authorised signatory. Liability under Section 138 attaches to the person who draws a cheque on an account maintained by him, while Section 141 extends vicarious liability only to persons who were in charge of and responsible for the conduct of the business of the company that committed the offence. The petitioner's only attributed role was delivery of the cheque; that by itself did not make him the drawer or attract criminal liability under the provision. Inherent jurisdiction could therefore be exercised at the pre-trial stage where the undisputed material showed that the essential ingredients of the offence were not satisfied against him.
Conclusion: The petitioner could not be made liable under Section 138 of the Negotiable Instruments Act, 1881, and the summoning order and consequential proceedings were quashed qua him.
Ratio Decidendi: Criminal liability under Section 138 of the Negotiable Instruments Act, 1881 is confined to the drawer of the cheque, and vicarious liability under Section 141 arises only against persons who were shown to be in charge of and responsible for the conduct of the drawer company's business at the relevant time.
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