2021 (11) TMI 725 - HC - Indian Laws

Dishonor of Cheque - drawer of cheque - Vicarious liability - petitioner has contended that she is not the signatory to the dishonoured Cheque and the said Cheque was issued from the Joint Account maintained by her along with her husband - Section 138 read with Section 141 of the N.I. Act - HELD THAT - The plain reading of Section 138 makes it clear that it has to be strictly interpreted as penal provision is made for commission of offence as prescribed under Section 138 of the N.I. Act. It is drawer of the Cheque who has to be made liable for the payment of amount of money due to the payee or the holder of the Cheque within the statutory limits as provided after the receipt of the legal notice demanding the cheque money. If the drawer of the Cheque fails to make payment of the said amount of money then such person shall be deemed to have committed offence - Section 138 of the N.I. Act being a penal provision it entails a conviction and sentence at the end of the criminal proceedings. There is a statutory presumption under Section 139 of the N.I. Act in favour of the holder of the Cheque. A prosecution under Section 138 of the N.I. Act is ultimately to bring the offender to suffer penal consequences. It appears that the present petitioner has been joined in criminal proceedings just as being the joint account holder with the husband. As per the facts of the case the Cheque was issued by accused no.1 in his personal capacity. The wife has no business relationship nor was having any transaction with the complainant on her personal basis thus she cannot be made vicariously liable for the act of the husband. It appears that the learned trial Court Judge has not considered the averments of the complaint and has not examined the status of the proposed accused prior to order for issuance of summons against the present petitioner who was joined in the criminal proceedings merely under the status of being wife of the accused no.1 and holding a joint account with the husband - The proceedings under Section 138 of the N.I. Act cannot be misused by any of the parties. The culpability is attached with the dishonour of the Cheque and it is only the drawer of the Cheque who can be made accused in any proceedings under Section 138 of the N.I. Act. From the bare reading of Section 138 of the N.I. Act it transpires that the liability of the drawer of the Cheque who has issued the Cheque from the joint account maintained by him and his wife does not specifically bear any implication to make the wife equally liable when the Cheque was drawn by her husband and therefore no vicarious liability can be fastened on the holder of a joint account by a mere fact that the dishonoured cheque was issued by the drawer of such a cheque from the same bank account. Application allowed.

Summary

Issues:
Petition under Article 226 and Section 482 for quashing Criminal Case No.825 of 2019 under Section 138 of the Negotiable Instruments Act, 1881.

Detailed Analysis:

1. Facts of the Case:
The respondent filed a complaint under Section 138 of the N.I. Act against the accused for dishonoring a cheque. The petitioner, wife of the accused, contended that she was not the signatory to the dishonored cheque as it was issued from a joint account with her husband. She sought quashing of the proceedings against her.

2. Legal Provisions and Precedents:
Section 138 of the N.I. Act imposes liability on the drawer of a dishonored cheque. The Supreme Court in Jugesh Sehgal v. Shamsher Singh Gogi outlined the ingredients for an offense under Section 138. The court's inherent powers under Section 482 of the Cr.P.C. can be invoked to prevent abuse of process of the court, as highlighted in State of Haryana v. Bhajan Lal.

3. Court's Analysis and Decision:
The court noted that the petitioner, being a joint account holder, was not liable under Section 138 as the cheque was issued by the husband in his personal capacity. The court emphasized that the wife cannot be vicariously liable for the husband's actions unless jointly signed. The trial court's failure to consider the complaint's averments led to the quashing of proceedings against the petitioner.

4. Conclusion:
The court allowed the application, quashing Criminal Case No.825 of 2019 against the petitioner. It directed the trial court to continue proceedings against the accused no.1 without influence from the current judgment. The court emphasized that the N.I. Act does not impose vicarious liability on joint account holders, ensuring justice and preventing misuse of legal provisions.

This detailed analysis provides a comprehensive overview of the judgment, focusing on the legal provisions, court's reasoning, and the final decision regarding the quashing of the criminal case against the petitioner.