When a company issued a cheque and it is dishonoured by the drawee bank it is said that offence under section 138 of the negotiable instrument act, is committed by the company. But company cannot be prosecuted for the offence because it is a legal entity and no physical punishment can be imposed upon a company.
Dishonour of cheque is an offence under section 138 of the Negotiable Instrument Act. Section 142 of the Negotiable Instrument Act enunciates about the cognizance of the offence committed under section 138 of the N I Act. The court shall take cognizance only on the complaint in writing filed by the payee or the holder in due course of the cheque.