2026 Supreme(Cal) 70

IN THE HIGH COURT AT CALCUTTA 
UDAY KUMAR, J.
N. Mamatha Nagesh –Petitioner
Versus 
State of West Bengal And Anr. – Respondent
CRR 2270 of 2025 
Decided On : 08-05-2026  

Criminal liability under the Negotiable Instruments Act is strictly limited to the drawer of the cheque. Vicarious liability does not extend to sole proprietorships. A demand notice failing to claim the exact cheque amount is legally insufficient, and magistrates must strictly conduct mandatory jurisdictional inquiries before summoning residents from outside their jurisdiction.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 141 - Code of Criminal Procedure, 1973 - Sections 202 and 482 - Bharatiya Nagarik Suraksha Sanhita, 2023 - Section 528 - Dishonour of cheque - Prosecution of non-signatory spouse - Vicarious liability - Whether Section 141 of NI Act applies to sole proprietorship - Statutory notice under Proviso (b) - Essentiality of demanding total cheque amount - Mandatory gatekeeping duty for out-of-station residents - Quashing of proceedings to prevent abuse of process. (Paras 1, 9, 27-29, 33-35, 41, 47-52)

(B) Criminal Procedure - Quashing of proceedings - Inherent powers of High Court - Suppression of material facts regarding business entity status - Prohibition of using criminal litigation as a tool for extra-legal coercion against non-signatories. (Paras 16, 55-60)

Facts of the case:
The Petitioner, spouse of an individual managing a business as a sole proprietorship, challenged criminal proceedings initiated against her for the dishonour of a cheque, although she was neither the account holder nor the signatory. The complainant attempted to invoke vicarious liability by describing the business entity ambiguously as a proprietorship or partnership, and issued a demand notice claiming only a minor fraction of the total cheque value. The trial court issued summon without the mandatory jurisdictional inquiry required for an accused residing outside the local limits of the court.

Findings of Court:
The court determined that a sole proprietorship lacks a separate legal identity and is not a 'company' under Section 141 of the NI Act, precluding vicarious liability. The statutory notice was found to be 'non-est' as it failed to demand the 'said amount' covered by the cheque. Furthermore, the court held that the magistrate failed in its mandatory 'gatekeeping' duty under Section 202 of the Cr.P.C. to verify the legal nexus before summoning a distant resident, thereby validating the request for quashing the proceedings.

Issues: Whether a non-signatory spouse can be held vicariously liable for a cheque issued by a sole proprietorship; whether a demand notice claiming a fraction of the cheque amount satisfies the statute; and whether the magistrate’s failure to conduct a jurisdictional inquiry warrants quashing.

Ratio Decidendi: Criminal liability under Section 138 is strictly in personam. Section 141 of the NI Act cannot be invoked against a sole proprietorship. A notice must demand the exact amount of the cheque, and the mandatory inquiry under Section 202 is an essential safeguard to protect distant residents from the harassment of groundless litigation.

Result: Criminal Revision Application allowed; proceedings against the Petitioner quashed.