Non-signatory to a cheque who is not a proprietor cannot be held liable under Section 138 of the NI Act.

The applicant (original accused No. 2) invoked Section 482 of the Code of Criminal Procedure, 1973 seeking to set aside the order passed below Exh. 1 in Criminal Case No. 1743 of 2019 by the learned Additional Chief Judicial Magistrate First Class, Visnagar, along with all consequential criminal proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

The complainant's case was that he paid Rs.17,40,000 to original accused Nos. 2 and 3, operators of the firm "Secure Consultancy" (original accused No. 1), for procuring a Canadian Passport and Work Permit Visa. Upon failure to secure the visa or refund, the accused issued a cheque for Rs.16,60,000 (with Rs.80,000 promised in cash), which was returned dishonoured with the endorsement "Fund Insufficient," prompting the Section 138 NI Act complaint.

The applicant contended he was not a signatory to the cheque, which was drawn by his mother, Mrs. Reema K. Bajaj (respondent No. 3), in her capacity as proprietor of the firm.

In support, the applicant produced the Udyog Aadhaar Memorandum (UAM) Certificate naming "Reema Kamlesh Bajaj" as the entrepreneur of "Secure Consultancy" (commencement: 01.04.2015; validity: up to 30.06.2022), and a Certificate dated 01.02.2017 issued by CA Subramanya S. Shenoy to the Branch Manager, IDBI Bank, confirming Mrs. Reema Kamlesh Bajaj as proprietor of M/s. Secure Consultancy, Vadodara.

The original complainant (respondent No. 2) opposed the application, contending that the question of proprietorship or partnership was a matter of evidence for trial.

1. Whether an accused who is neither the signatory/drawer of the dishonoured cheque nor the proprietor of the firm can be held liable under Section 138 of the NI Act.

2. Whether the order issuing process and all consequential criminal proceedings in Criminal Case No. 1743 of 2019 ought to be quashed and set aside qua the applicant in exercise of inherent jurisdiction under Section 482 of the CrPC.

The Court primarily applied Section 138 of the Negotiable Instruments Act, 1881, resting on the trite legal principle that only the drawer of the cheque can be held liable under the said provision.

The Court exercised its inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, which empowers the High Court to quash criminal proceedings where continuance would amount to an abuse of process or where no prima facie case is made out.

Principle that the High Court should not conduct a "mini trial" on disputed questions of fact (such as proprietorship or partnership) under Section 482.

The Court applied the settled rule—that liability under Section 138 of the NI Act attaches exclusively to the drawer of the cheque—directly to the uncontroverted documentary record. The cheque in question was drawn by Mrs. Reema K. Bajaj, the applicant's mother, in her capacity as proprietor.

The UAM Certificate and the Chartered Accountant's Certificate, both taken on record, independently and conclusively established that the proprietorship of "Secure Consultancy" vested in Mrs. Reema Kamlesh Bajaj alone, not the applicant.

Notably, the learned advocate for the original complainant could not controvert the factum that only the drawer could be held liable. Consequently, the "mini trial" objection failed: there was no genuine factual dispute requiring adjudication at trial, as the documentary evidence removed any prima facie basis to fasten liability on the applicant.

The order passed below Exh. 1 in Criminal Case No. 1743 of 2019 by the learned Additional Chief Judicial Magistrate First Class, Visnagar, together with all criminal proceedings initiated pursuant thereto, was set aside qua the present applicant only.