Whom should i issue notice u/sec138...?

Under the circumstances given ,section 138 of Negotiable Instrument Act is not applicable .As the drawer of the cheque has not issued the cheque for discharge of his legal /financial liability.

SECTION 138 OF THE NEGOTIABLE INSTRUMENT ACT IS  APPLICABLE ONLY IN CASES WHERE LIABILITY EXISTS. UNDER THE GIVEN CIRCUMSTANCES FRIEND OF THE BORROWER WHO GAVE THE CHEQUE IS NOT HAVING ANY LIABILITY. HENCE IN MY VIEW SECTION 138 OF NI ACT IS NOT APPLICABLE.

I don't agree with the aforesaid views. The friend of the borrower is liable under 138 NI Act. 

Please check G.N.GURAPPA V/S A.S.FINANCE & INVESTMENT DOC 1999 PAGE 111

You have to issue notice u/s 138 [b] of N.I.Act to both borrower and his friend. As friend of borrower has issued the cheque after having taken the liability of borrower to make payment so he is liable of consequences of cheque bouncig.Mr sachin is absolutely right. 

Sec 138 notice is to issued against the drawer of the chq. Sec 138 is not applicable to the borrower (unfortunate & surprising!!).

Whether there is no case because there is no liablility is debatable. As per Sec 139, it is "presumed, unless the contrary is proved", that the holder of the chq recived the chq for "discharge, in whole or in part, of any (my comments: it is not necessary that drawer should have own liability) debt or other liability". Therefore, if the payee/holder of the chq is confident that it can prove that the drawer had issued the chq to discharge any liability towards the payee/holder, I think there is definitely a case here.

Pls note that (1) only holder of the chq (i.e. payee, and not the borrower) can proceed u/s 138, (2) Sec 138 & 139 does not say that the chq has to be issued to discharge the drawer's liability. It can actually be to discharge anyone's liability.

Thanks to all my learned friends...