A cheque-signing treasurer’s disputed liability must be adjudicated at trial, not quashed.

The petitioner, an ex-Treasurer of P.D. Memorial Religious and Educational Association, was named as accused No. 3 in a prosecution under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”).

The Association’s cheque, signed by the petitioner as Treasurer, was returned with the endorsement “payment stopped by drawer.”

The complainant issued a demand notice to the Association and accused No. 2, but the demand was not met; a private complaint followed, and the Magistrate took cognizance

The petitioner sought to quash the proceedings, arguing, among other things, that he had not received a separate notice and was not personally liable for the Association’s alleged debt

Whether the proceedings against the petitioner should be quashed because no separate statutory demand notice was served on him

Whether the petitioner’s role as the Association’s Treasurer and signatory to the cheque was sufficient, at this stage, to permit the Section 138 proceedings to continue against him

Section 138 of the NI Act provides for prosecution where a cheque is returned unpaid and the statutory conditions, including demand for payment by written notice, are met; Section 139 provides a presumption in favour of the holder of the cheque

The High Court exercised its jurisdiction under Articles 226 and 227 of the Constitution read with Section 482 of the Code of Criminal Procedure to consider the request to quash the proceedings

The Court relied on Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148, and Kuntegowda v. Thurubaiah, 2026 SCC OnLine SC 1485, in referring to the complainant’s Section 139 presumption

The Court noted that the petitioner had signed the cheque as the Association’s Treasurer and was authorised to sign its cheques

It also considered his position as Treasurer relevant to his awareness of the Association’s financial condition and observed that the stop-payment instruction had been issued to the Association’s bank

Whether sufficient funds were maintained and whether the petitioner acted on accused No. 2’s instructions were matters for adjudication before the Magistrate; the latter contention could be raised as a defence at trial

In light of the Section 139 presumption and the issues requiring trial, the Court found no basis to quash the proceedings

Pending applications, if any, were consigned to the record