Facts and Procedural Background:

• The Appellant, M/s Laxmi Dyechem, is a proprietorship firm that sells chemicals, specifically Naphthalene. The firm supplied chemicals to the respondent company against various invoices and bills.
• The Respondent was a company that received chemical supplies from the Appellant. To pay outstanding dues, the company issued multiple post-dated cheques under the signatures of its authorised signatories.
• The Appellant presented 117 cheques issued by the Respondent, which the bank dishonoured due to incomplete signatures, no image found, or a signature mismatch. After being notified under Section 138 of the Negotiable Instruments Act of 1881, the payment was not made, leading the Appellant to file 40 complaints before the Trial Court.
• The trial court took cognizance of the matter and summoned the Respondents. The Respondents then moved to the High Court of Gujarat, which quashed the complaints, ruling that dishonour due to a signature mismatch does not attract Section 138 of the Negotiable Instruments Act.
• Hence, the Appellant filed the present appeal before this court to challenge the High Court decision, stating that the quashing of the complaints was unjustified and that dishonour due to signature mismatch should be considered under the scope of Section 138 of the Negotiable Instruments Act.

Main issue:

Would dishonour of a cheque constitute an offence only in one of the two conditions i.e. Insufficient Fund and Exceed Arrangement envisaged under Section 138 of the Act?