Cheque-dishonour liability under Section 138 of the NI Act is...

Cheque-dishonour liability under Section 138 of the NI Act is personal to the drawer, account holder and signatory; a non-signatory spouse of a sole proprietor cannot be prosecuted merely on allegations of control. A sole proprietorship is not a company for Section 141, so vicarious liability cannot extend to persons other than the proprietor. A demand notice seeking only part of the cheque amount fails the requirement to demand the "said amount of money", preventing the cause of action from arising. Further, process against an accused residing outside the Magistrate's jurisdiction requires a mandatory prior inquiry or investigation. Suppression of the concern's sole-proprietorship status was treated as abuse of process. Proceedings against the spouse were quashed, while trial against other accused continued.

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