28.09.2026 Item No.19. Ct. No. 42 ASR CRR/2171/2024 THIRUNAVUKARASU VS MAHINDRA AND MAHINDRA FINANCIAL SERVICES LTD AND ANOTHER Mr. Arvind Gupta Mr. Sandip Ray Md. Irfan Mr. Amit Singh …..For the Opposite Parties. 1. None appears to represent the petitioner nor any accommodation is prayed for on his behalf. 2. This matter is running in the list continuously 15th June, 2026. It appears from the order dated 23rd September, 2026 that despite proper service effected to the petitioner, none appears to represent him in this matter. 3. Considering the long pendency of this matter, and the continued absence of representation of the petitioner despite directions of this Court, this matter is taken up ex-parte for consideration and disposal on the basis of the materials already on record. 4. The petitioner, by the instant Criminal revisional application filed under Section 482 of the Cr.P.C. has invoked the inherent jurisdiction of this court, seeking quashing of the criminal proceeding arising out of the complaint case no. C.S. 155716 of 2023 under Sections 138 and 141 of the Negotiable Instrument 2 Act, 1881 currently pending before the 19th Court of learned Metropolitan Magistrate, Kolkata, including the order dated 28th November, 2023 whereby cognizance of the offence was taken and process was issued against the petitioner. 5. The opposite party no. 1, Mahindra and Mahindra Financial Limited, a prominent non-banking financial institution engaging in the business of lending financial assistance for acquiring vehicle assets on hypothecation and advancing financial assistance as a secured and unsecured loan, instituted a complaint case before the Court of learned Chief Metropolitan Magistrate, Calcutta under Sections 138 and 141 of the Negotiable Instruments Act, 1881 (hereinafter referred as ‘N.I. Act’ in short) through its authorized representative, Somnath Nandy against the principle borrower, Malathi and the petitioner. 6. The factual matrix, as unfurled from the averments made in the petition of complaint, are; in connection with loan transaction entered into by and between the complainant company and the principal borrower, a cheque bearing no. 451794 dated 6th October, 2023 for an amount of Rs. 10 lakhs was drawn on the State Bank of India, New Washermanpet Branch towards the discharge of the existing debt and liability. 3 7. When the said cheque was presented for encashment through the complainant’s banker, HDFC Bank, New Market Branch, Kolkata within its period of validity, the said cheque was returned dishonoured vide return memo dated 10th October, 2023 with the endorsement ‘funds insufficient’. 8. Upon receipt of the intimation of the dishonoured cheque, the complainant issued a statutory demand notice dated 19th October, 2023 via speed post on 20th October, 2023 calling upon the accused persons to pay the cheque amount within 15 days from the date of receipt of the notice. The envelope containing the notice was properly addressed, stamped and posted. Upon failure of the accused persons to make payment within the statutory period, the complaint was filed before the Court of the learned Chief Metropolitan Magistrate, Kolkata leading to the institution of the complaint case, the order of cognizance and issuance of process dated 28th November, 2023 passed by the 19th Court of the slearned Metropolitan Magistrate, Kolkata. 9. Although the petitioner remained unrepresented at the time of hearing of the present revisional application, the written grounds taken in the revisional application 4 have been duly perused and evaluated. The core contentions, as it appears therefrom, are: (i) The petitioner is merely a guarantor to the loan agreement entered into by and between the principal borrower and the opposite party no. 1. The petitioner neither executed/issued the cheque in question nor did he put his signature on the said instrument or any other negotiable instrument; the sole signature on the cheque in question as well as the bank account the said cheque was drawn on, belong entirely to the principal borrower. (ii) No corporate entity or company has been properly arraigned as an accused in the said complaint, thereby failing to satisfy the mandatory statutory prerequisites of Section 141 of N.I. Act to initiate prosecution against a company, and that the complaint lacks specific, requisite averments regarding the petitioner’s role or responsibility in conducting the said business. (iii) The exact date of receipt of the statutory demand notice by the principal accused has not been properly pleaded in the complaint. 5 10. Per contra, the learned counsel for the Opposite Party No. 1 submits that no document in respect of the loan agreement has been filed by the petitioner and that questions relating to the receipt of the statutory demand notice are questions of fact which ought to be determined by the Trial Court by way of a protracted trial and recording of evidence. 11. To resolve the core dispute, it is apposite to examine the statutory framework governing criminal liability under the N.I. Act, 1881. 12. Section 138 of the N.I. Act stipulates that where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person is returned by the bank unpaid, such person shall be deemed to have committed an offence. The foundational liability under Section 138 attaches primarily and strictly to the ‘drawer’ of the cheque. 13. A guarantor in a financial transaction undertakes a civil obligation to guarantee the repayment of a loan if the principal borrower defaults. However, criminal liability under Section 138 cannot be fastened on an individual merely by dint of their status as a guarantor. As consistently held by judicial precedents, a guarantor who has not drawn, signed, or issued the 6 specific cheque in question cannot be prosecuted under Section 138 simply because they stood as a guarantor for the underlying loan agreement. Standing as a guarantor creates civil liability for debt recovery, but it does not translate into criminal drawer liability unless the guarantor is also the drawer or the joint signatory of the dishonoured instrument. 14. Where penal liability is sought to be extended beyond the primary drawer under Section 141 of the N.I. Act, strict statutory conditions apply. The corporate entity or firm must be arraigned as an accused, and specific, unambiguous averments must demonstrate that the person sought to be prosecuted was in charge of, and responsible to the company for conduct of its business. A non-signing guarantor cannot be roped into a Section 138 complaint in complete absence of these statutory ingredients. 15. This Court has meticulously examined the petition of complaint, the statutory notice, the return memo, the impugned order of cognizance dated 28th November 2023, and the overall materials on record in the absence of any oral submission of the petitioner. 16. Upon a bare perusal of the cheque, it is transparently clear that the instrument was drawn by the principal borrower on an account maintained by them. The 7 present petitioner, Thirunavukarasu, is neither the drawer nor a signatory to the cheque. His involvement, as is evident from the loan documentation, was strictly limited to that of a guarantor or co-introducer to the underlying financial agreement. 17. The core question for determination in the present application is thus, Can a guarantor be held guilty solely by dint of being a guarantor, and should they be impleaded in a Section 138 case? 18. The answer is an unequivocal no. A guarantor cannot be prosecuted or held criminally liable under Section 138 of the N.I. Act merely because they had signed the loan agreement as a guarantor. Impleading a non- signing guarantor in a Section 138 complaint without establishing that they were the drawer of the instrument or that they fulfilled the rigorous vicarious liability requirements under Section 141 of the N.I. Act is fundamentally flawed in law. 19. To permit a criminal trial to proceed against an individual who is not the drawer of the dishonoured cheque, particularly when the petitioner’s limited status as a guarantor stands uncontradicted by any material showing execution of the instrument, would constitute an abuse of the process of the Court. Consequently, the continuation of the criminal 8 proceeding against the present petitioner is legally unsustainable and warrants interference under Section 482 Cr.P.C. 20. In light of the above discussion, settled legal principles governing drawer liability under Section 138 N.I. Act, and the facts disclosed in the materials on record, this Court is of the considered view that the impugned proceeding cannot be allowed to continue against the petitioner and deserves to be quashed. 21. The present criminal revisional application, C.R.R. No. 2171 of 2024 is hereby allowed. 22. The criminal proceeding pending before the 19th Court of Learned Metropolitan Magistrate at Kolkata in connection with the Complaint Case No. CS 155716 of 2023 under Sections 138 and 141 of the N.I. Act, including the order of cognizance and the issuance of summons dated 28th November, 2023 is hereby quashed only in respect of the present petitioner, Thirunavukarasu. 23. Connected pending application, if any, is also disposed of accordingly. 24. Interim order, if there be any, stands vacated. 25. There shall be no order as to costs. 26. Case diary, if any, be returned to the learned counsel for the State. 9 27. Let the Trial Court records, if any, along with the order be transmitted to the learned Trial Court for necessary information or compliance. 28. Urgent photostat certified copy of the order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (Uday Kumar, J.)