The Punjab and Haryana High Court quashed a Section 138 NI Act complaint and summoning order against a petitioner who was not a signatory to the dishonoured cheque, after the complainant expressly conceded that no case was made out against him. The ruling reinforces that prosecution under the Negotiable Instruments Act requires the accused to be a signatory or for specific averments to be made for vicarious liability.
Background & Facts
The Dispute
The petitioner, Abhishek Upadhyay, faced prosecution under Section 138 of the Negotiable Instruments Act, 1881 pursuant to Complaint No. NACT/2338/2019 filed by respondent No.1, Harish Chand Sharma. A summoning order dated 27.03.2019 had been passed by the trial court directing the petitioner to appear and face trial. The petitioner challenged the complaint and summoning order by filing a petition under Section 482 of the Code of Criminal Procedure, 1973 before the High Court, contending that he was not a signatory to the cheque in question and therefore could not be prosecuted under Section 138.
Key Facts
- Complaint No. NACT/2338/2019 was filed by Harish Chand Sharma (respondent No.1) under Section 138 NI Act
- The trial court passed a summoning order on 27.03.2019 directing the petitioner to appear
- The petitioner, Abhishek Upadhyay, was not a signatory to the cheque that formed the subject matter of the complaint
- The petitioner filed CRM-M-42031-2019 under Section 482 CrPC seeking quashing of the complaint and summoning order qua himself
- Respondent No.1 (the complainant) appeared through counsel and expressly stated he had no objection to the petition being allowed
Procedural History
- 27.03.2019: Summoning order passed by the trial court in Complaint No. NACT/2338/2019
- 2019: Petition under Section 482 CrPC (CRM-M-42031-2019) filed before the High Court of Punjab and Haryana
- 17.08.2026: High Court heard the matter; respondent No.1's counsel filed fresh memo of appearance and submitted no objection
- 17.08.2026: High Court allowed the petition and quashed the complaint and summoning order qua the petitioner
Relief Sought
The petitioner sought quashing of Complaint No. NACT/2338/2019 and the summoning order dated 27.03.2019 insofar as they pertained to him, on the ground that he was not a signatory to the cheque and no case under Section 138 NI Act was made out against him.
The Legal Issue
The central question was whether a person who is not a signatory to a cheque can be prosecuted under Section 138 of the Negotiable Instruments Act, and whether the complaint and summoning order should be quashed when the complainant himself concedes that no case is made out against such person.
Arguments Presented
For the Petitioner
Dr. Anand Bishnoi and Mr. Shivam Gupta, advocates for the petitioner, contended that the petitioner was not a signatory to the cheque in question. They argued that Section 138 NI Act creates a strict liability offence against the drawer of the cheque, and since the petitioner did not sign the cheque, no offence under Section 138 could be attributed to him. They further submitted that the complaint did not contain any specific averments to attract vicarious liability under Section 141 NI Act (offences by companies).
For the Respondent
Ms. Samridhi Sareen, Legal Aid Counsel, and Mr. Ritesh Tomar, advocate for respondent No.1 (the complainant), filed a fresh memo of appearance and expressly submitted that they had no objection if the petition was allowed. They conceded that the complaint and summoning order should be quashed qua the petitioner since he was not a signatory to the cheque. This concession effectively settled the adversarial aspect of the proceedings.
The Court's Analysis
The Court, per Hon'ble Mrs. Justice Manisha Batra, noted two critical facts: first, the petitioner was not a signatory to the cheque; second, the complainant (respondent No.1) had no objection to the petition being allowed. The Court observed that Section 138 NI Act penalises the drawer of a cheque who has signed the instrument. Since the petitioner did not sign the cheque, the foundational requirement for prosecution under Section 138 was absent.
The Court further noted that the complainant's concession removed any adversarial contest on the merits. In view of the unopposed nature of the petition and the clear factual position that the petitioner was not a signatory, the Court found no reason to continue the prosecution against him.
"In view of the aforesaid submission, having no objection raised by learned counsel for respondent No.1 and the fact that the petitioner is not a signatory to the cheque in question, the present petition is allowed."
The Court's reasoning was straightforward: no signature, no offence under Section 138. The complainant's consent reinforced this conclusion. The Court did not need to engage in elaborate statutory interpretation or precedent analysis given the conceded position.
The Verdict
The petitioner succeeded. The High Court allowed the petition and quashed Complaint No. NACT/2338/2019 and the summoning order dated 27.03.2019 qua the petitioner only. The Court directed that a copy of the order be sent to the learned trial court for compliance. The quashing was limited to the petitioner; the proceedings against the other accused (if any) would continue unaffected.
What This Means For Similar Cases
Non-Signatory Cannot Be Prosecuted Under Section 138
- Section 138 NI Act applies only to the drawer who has signed the cheque; mere association with the drawer or the transaction is insufficient
- Practitioners should verify signatory status at the threshold and challenge summoning orders against non-signatories under Section 482 CrPC
- The judgment reaffirms that vicarious liability under Section 141 requires specific averments in the complaint against directors/officers of a company
Complainant's Concession Can Secure Quashing
- When the complainant expressly concedes that no case is made out against an accused, courts will readily quash proceedings qua that accused
- This provides a practical exit route for wrongly impleaded parties without prolonged litigation
- Counsel should explore consent-based resolutions where the factual position (non-signatory) is clear and undisputed
Limited Quashing Preserves Proceedings Against Actual Accused
- The Court's order was expressly limited to the petitioner ("qua the petitioner only")
- This ensures that legitimate prosecution against the actual drawer/signatory continues unaffected
- Practitioners seeking quashing for one accused must frame prayers narrowly to avoid unintended consequences for co-accused
