2021 (11) TMI 986 - HC - Indian Laws

Dishonor of Cheque - Signatory of cheque or not - sections 138 and 142 of Negotiable Instruments Act - HELD THAT - Admittedly, the cheque has been issued in the joint account maintained by both A1 and A2. But, the cheque has been signed only by A1/husband and the petitioner/A2 is not a signatory to the cheque. In the said circumstances, the petitioner cannot made liable for the prosecution, and A1, who was the drawer of the cheque alone is liable to be prosecuted under Section 138 of Negotiable Instruments Act. As the petitioner is not a drawer of the cheque, no prosecution can be initiated against her. This Criminal Original Petition is allowed - the case against the petitioner/A2 in STC No. 5975 of 2014 on the file of the Judicial Magistrate, Sathyamangalam, is quashed. Since the case is pending from the year 2014, the trial Court is directed to proceed with the trial against A1 and dispose the same within a period of three months from the date of receipt of a copy of this order.

Summary

Issues:
Petition to quash a private complaint under Section 138 of Negotiable Instruments Act based on joint account ownership and liability of the accused.

Analysis:
The case involved a petition to quash a private complaint under Section 138 of the Negotiable Instruments Act. The complainant alleged that the husband (A1) borrowed money and issued a joint account cheque that was dishonored. The wife (A2) was made an accused as a joint account holder. The petitioner (A2) contended that she should not be held liable as she did not sign the cheque. The respondent argued that both husband and wife jointly borrowed the amount and closed the account to avoid repayment, making them jointly liable. The court examined the submissions and materials on record.

The court noted that although the cheque was issued from a joint account, only the husband (A1) signed it, not the wife (A2). Citing a Supreme Court judgment, the court held that in cases of joint accounts, all holders must sign the cheque for prosecution under Section 138. The court emphasized that the drawer of the cheque alone can be prosecuted under the Act. Therefore, the petitioner (A2) could not be prosecuted as she was not a signatory to the cheque. The court allowed the petition to quash the case against A2 and directed the trial court to proceed with the trial against A1 within three months.

In conclusion, the High Court quashed the case against the petitioner (A2) in a complaint under Section 138 of the Negotiable Instruments Act. The judgment clarified the liability of joint account holders in cheque dishonor cases, emphasizing the requirement for all holders to sign the cheque for prosecution. The court's decision was based on legal principles and a Supreme Court precedent, ensuring that only the drawer of the cheque can be held liable under Section 138.