Cheque Dishonour Prosecution Quashed Where Complaint Lacked Averments That the Accused Company Issued the Cheque

Criminal proceedings under Section 138 of the Negotiable Instruments Act could not be sustained where the complaint did not allege that the petitioner company drew or issued the cheque, and no substantive averments showed that the statutory ingredients of the offence were made out against it. The cheque was attributed to another accused, while the only link pleaded against the petitioner was affiliation with that company. In the absence of a prima facie case, continuation of prosecution was treated as an abuse of process, and the High Court exercised inherent jurisdiction to quash the proceedings against the petitioner.

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Issues: Whether criminal proceedings for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 could be sustained against a company which was not alleged to have issued the cheque and against whom no substantive averments attracted the ingredients of the offence.

Analysis: Section 138 applies where a cheque drawn by a person on an account maintained by that person is returned unpaid for the specified reasons and the statutory requirements as to presentation, notice and non-payment are satisfied. On the allegations in the complaint, the cheque was stated to have been signed by another accused, and the only allegation against the petitioner was that the other company was affiliated to it. No averment showed that the petitioner issued the cheque or that the ingredients of the offence were otherwise attracted against it. In such circumstances, the complaint did not disclose a prima facie case against the petitioner, and continuation of the prosecution would amount to an abuse of process. The principle governing exercise of inherent jurisdiction to prevent abuse of process and secure the ends of justice was applied.

Conclusion: The proceedings against the petitioner were not maintainable and were liable to be quashed.

Final Conclusion: Criminal prosecution under Section 138 could not proceed against the petitioner on the pleaded facts, and the High Court exercised its quashing jurisdiction in its favour.

Ratio Decidendi: Where the complaint does not contain necessary averments showing that the accused drew the cheque or that the statutory ingredients of Section 138 are otherwise made out, criminal proceedings cannot be continued and may be quashed to prevent abuse of process.

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