( 1 ) THE short question that arises for consideration in this petition is whether it was permissible to launch a prosecution under Section 138 of the Negotiable Instruments Act against all the Directors of the Company notwithstanding the nomination made by the Company. In order to appreciate the arguments advanced for and against the contention of the petitioners and respondent it is necessary to succinctly refer to the facts of the case.

( 2 ) THE respondent lodged a complaint under Section 200 of the Cr. P. C. , against these petitioners alleging that on 22-2-1996, A-2 executed an agreement on behalf of A-1. In connection with the transaction, the 1st petitioner A-l on behalf of all the accused issued in favour of the complainant a cheque dated 31-10-1996 bearing No. 865657 drawn on Canara Bank, industrial Finance Branch, Bangalore, for a sum of Rs. 35,00,000/- lakhs in part payment of the advance received in that transaction. Subsequently, on 11-11-1996 after informing the petitioners the respondent presented the cheque for encashment. However on 13-11-1996 the said cheque was returned dishonoured with an endorsement "not arranged for". Thereafter, the respondent got issued sta

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