Date of judgment:
29th October 2021
Bench:
Justice Shaheem Akhter
Parties:
Appellant – KodamDanalakshmi
Respondent – State of Telangana
Subject
A petition was filed u/s 482 of Cr.P.C to quash criminal proceedings on the argument that the petitioner was not subject to the signatory. This petition was allowed by the High Court.
Legal provisions
- Section 138 of NI Act- Cheque dishonour due to insufficient money in the account, etc.
Overview
- The petitioner had a joint account with her husband/complainant. She filed a petition u/s 482 ofCr.P.C. to quash proceedings against her on the file of VII and on file of XII Special Metropolitan Magistrate at Hastinapur.The charges were held against her as a result of dishonour of cheque which were applied against her by her husband.
- Learned counsel from the petitioner submitted that the petitioner is being implicated falsely and that she is not a signatory to the cheques. The counsel referred two cases, Alka KhanduAvhad v Amar Shyamprasad Mishra and Ors and Mrs.Aparna A. Shah v M/s Sheth Developers Pvt.Ltd. &Anr requesting to squash the proceedings against the petitioner.
- The counsel for complainant argued that the petitioner was maintaining the joint account with the complainant and the cheques to the subject were drawn by that account. Moreover, he submitted that the petitioner was aware of the transactions and handing over of the cheques.
Issue
- Whether the criminal proceedings against the petitioner can be quashed.
Judgment Analysis
- The petition by the petitioner was allowed and the criminal proceedings against her was quashed.
- The Court relied on the judgment of Alka KhanduAvhad which was referred by the petitioner where Hon’ble Supreme Court stated section 138 of NI Act does not includes the concept of joint liability. Also,in the case of joint liability, any person who has not drawn the cheque from the account which is maintained by him cannot be prosecuted for offence u/s 138 of NI Act. A person may be jointly liable to pay the debt but such a person cannot be held liable unless the account is jointly maintained by him as well as he is the signatory on the cheque.
- Justice Shameem Akhter even took note of the decision in case of Mrs.Aparna A. Shah v M/s Sheth Developers Pvt.Ltd. &Anr where Hon’ble Supreme Court held that only the person who has drawn the cheque can be held liable and not the person who has a joint account by him unless the cheque has been signed by him.
- The terms “such person shall be deemed to have committed an offence” in Section 138 of the N.I. Act pertain to the person who has drawn the cheque, not anyone else, the Court said, with the exception of the situations listed in Section 141 of the N.I.Act.
- The Court in this matter laid down that the petitioner who is the wife of signatory of cheque is only a joint account holder and not the signatory with subject to the cheques.
Conclusion
This is a case related to dishonour of cheque where the High Court of Telangana held that a person who is a joint account holder and where such person has not signed the cheque will not be prosecuted under section 138 of NI Act of 1981.The penalties for a cheque dishonour are outlined in Section 138 of the NI Act. A check is a negotiable document drawn on a specific banker and not expressly stated to be payable on demand otherwise.
Section 138 deals with check dishonour due to a lack of money in the account. According to the provision, if a cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from that account for the discharge of any debt is returned by the bank unpaid because the account does not have sufficient funds to honour the cheque, that person is deemed to have committed an offence and is punishable under Section 138 of the Negotiable Instrument Act.
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