2018 (9) TMI 43 - HC - Indian Laws

Dishonor of cheque due to insufficiency of funds - Offence u/s 138 and 142 of Negotiable Instrument Act - case of petitioner is that offence under Section 138 of Negotiable Instrument Act would not attract against him for the reason that he is not the drawer of the cheque - Held that - It is seen from the complaint that the cheque is not belonging to the petitioner and the cheque pertains to the account No.88 and it stands in the name of the second accused. The other cheques issued by the second accused belong to her account. Though the loan jointly borrowed by both the accused, the alleged cheque was not signed by the petitioner and as such, no offence under Section 138 of Negotiable Instrument Act can be said to have been committed by the petitioner. The complaint against the petitioner is not maintainable and the respondent/complainant can very well proceed as against the second accused - quash petition allowed - decided in favor of petitioner.

Summary

Issues:
Quashing of complaint under Sections 138 and 142 of Negotiable Instrument Act against the petitioner and another.

Analysis:
The complaint filed for the offense under Sections 138 and 142 of the Negotiable Instrument Act against the petitioner and another is challenged in this quash petition. The complainant alleged that both accused jointly borrowed a sum of ?10,00,000 on a pronote, with the first accused issuing a cheque to discharge the liability. However, the cheque was dishonored due to insufficient funds. The second accused then issued two more cheques, which were also returned for the same reason. The first accused, in this case, argued that he is not the drawer of the cheque, and his signature was forged. The respondent contended that the first accused knowingly issued the cheque from the second accused's account.

The court examined the complaint and found that the alleged cheque did not belong to the petitioner, and the account in question was linked to the second accused. The court referred to Section 138 of the Negotiable Instrument Act and emphasized the essential elements required to establish an offense under this section. Citing a previous judgment, the court highlighted that all specified ingredients must be satisfied for an offense to be deemed committed under Section 138. Additionally, the court referred to another judgment indicating that in the case of joint accounts, all account holders must sign a cheque for prosecution under Section 138.

Based on the legal principles outlined in the judgments cited, the court concluded that the complaint against the petitioner was not maintainable as he was not the drawer of the cheque in question. The court allowed the quash petition, quashing the complaint against the petitioner alone and directing the expeditious disposal of the case against the second accused. The court emphasized the need for a swift resolution, setting a deadline of six months for the disposal of the complaint.

In summary, the court's decision was based on a detailed analysis of the legal provisions under the Negotiable Instrument Act, supported by relevant judgments emphasizing the necessity of fulfilling all essential elements to establish an offense under Section 138. The judgment highlighted the importance of strict interpretation of penal statutes and clarified the liability of joint account holders in such cases.