2024 (7) TMI 1210 - HC - Indian Laws

Dishonour of Cheque - vicarious liability u/s 141 of the NI Act - HELD THAT - In the present case, the issue whether the statutory notice was issued, in view of the factual situation wherein the respondent states that the petitioner refused to accept notice while the petitioner states that no such notice was received, is a matter of trial. However, the complaint case must fail owing to a more fundamental issue. The subject cheque, copy of which has been placed on record, was signed only by petitioner s late husband- Arvind Gupta. Although it is conceded that the cheque was issued from an account jointly in the name of the Arvind Gupta and Neeta Gupta (petitioner herein) however, it is a matter of fact that the said cheque is not signed by the petitioner. The criminal complaint filed against the present petitioner is clearly an abuse of process of law and the same is liable to be quashed and set aside - Consequently, the present petition is allowed and the criminal complaint against the petitioner is quashed.

Summary

Issues Involved:
Quashing of complaint case under Section 138 of Negotiable Instruments Act.

Analysis:
The petitioner filed a petition under Section 482 Cr.P.C. read with Article 227 of the Constitution of India seeking the quashing of Complaint Case No.19930/2016 titled "Suman Anand vs Neeta Gupta" under Section 138 of the Negotiable Instruments Act. The respondent claimed that the petitioner took a friendly loan of Rs.20,00,000 and issued a cheque to repay it, which was dishonored due to stop payment. The respondent sent a statutory demand notice, but the petitioner denied receiving it and claimed the cheque was issued by her late husband. The respondent argued that the petitioner was liable to pay the amount as a friendly loan. The legal position under Section 138 of the NI Act was discussed, emphasizing the conditions required for prosecution under this section. The liability arises from the dishonour of a cheque issued for the discharge of a debt or liability, and a prior statutory notice is mandatory before prosecution.

The court noted that the complaint case failed on a fundamental issue as the subject cheque was signed only by the petitioner's late husband, not by the petitioner herself. Referring to relevant Supreme Court judgments, it was established that in cases of joint accounts, a joint account holder cannot be prosecuted unless the cheque is signed by each joint account holder. The court cited the principle that only the drawer of the cheque can be made an accused in proceedings under Section 138 of the Act. The court also referred to another Supreme Court case emphasizing that a person can only be prosecuted under Section 138 if they are the signatory to the cheque and the cheque has been drawn on an account maintained by them for the discharge of a debt or liability.

Based on the legal principles and case law cited, the court concluded that the criminal complaint against the petitioner was an abuse of process of law and ordered it to be quashed. The petition was allowed, and the criminal complaint against the petitioner was set aside. The pending application was disposed of as infructuous.