A joint account holder cannot be prosecuted under Section 138 of the N.I. Act unless they are also a signatory on the cheque; prosecution of a non-drawer constitutes an abuse of process.

JUDGMENT :

M.W. CHANDWANI, J.

Heard.

2. Rule. Rule made returnable forthwith. Heard finally by consent of the learned counsels appearing for the parties.

3. The petition seeks quashing and setting aside of the order dated 13.04.2017 passed below Exhibit-1 by the learned Judicial Magistrate First Class, Nagpur, in S.C.C. No.16088 of 2016, thereby issuing process against the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.

4. Shorning of unnecessary details, the case is as follows :

The respondent – State Co-operative Society Limited, Nagpur, filed a criminal complaint bearing S.C.C. No.16088 of 2016 against the petitioner as well as her husband for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the N.I. Act”). The Co-operative Society had advanced a loan to the tune of Rs.2,75,00,000/- to the husband of the petitioner. The petitioner as well as one Mr Vishal Tilakraj Malik stood guarantors to the said loan transaction. It is further submitted that the husband of the petitioner issued a cheque bearing No.003542 dated 10.08.2016 amounting to Rs.10,00,000/- drawn on Kotak Mahindra Bank, Santacruz (W), Mumbai, signed by him being joint account holder alongwith the petitioner, which came to be dishonoured. In-spite of issuance of statutory notice, the petitioner, her husband and Vishal did not pay the amount, therefore, the aforesaid complaint came to be filed against them. The learned Trial Court issued the process against the petitioner and her husband and drafted the proceedings against Vishal. Feeling aggrieved with the order of issuance of process, the present petition came to be filed.

5. Mr S. S. Sitani, learned counsel appearing for the petitioner, would submit that the petitioner is the wife of Mr Nirav Pravin Shah, who allegedly took a loan to the tune of Rs.2,75,00,000/- from the respondent – Co-operative Society. The petitioner and her husband are the joint account holder in Kotak Mahindra Bank. The cheque in question is signed by the husband of the petitioner. The petitioner is not a signatory to the said cheque in question. Just because the petitioner is the joint account holder alongwith her husband in Kotak Mahindra Bank, she cannot be held liable for the cheque issued and signed by her husband. She is not the drawer of the said cheque, therefore, the learned Trial Court should not have issued the process against the petitioner. To buttress his submission, he seeks to rely on the decision of the Hon’ble Supreme Court in the case of Aparna A. Shah vs. Sheth Developers Private Limited and Anr, (2013) 8 SCC 71 .

6. Per contra, Mr A. Tripathi, learned counsel appearing for the respondent, submits that a presumption cannot be made that the signatory is liable for the punishment under Section 138 of the N.I. Act. According to him, it is not the signatory who is made liable, but it is the person who issued the cheque is liable for punishment under Section 138 of the N.I. Act. The person, who draws a cheque on the bank for payment of legal dischargeable liability shall be held liable under Section 138 of the N.I. Act.

7. Mr Tripathi, learned counsel for respondent, took me to the definition of person enumerated under Section 3(42) of the GENERAL CLAUSES ACT , 1987 submitting that “person” includes body of individuals and therefore, the petitioner, who holds the joint account and also the co-borrower, is liable for punishment under Section 138 of the N.I. Act. He supported the impugned order and sought rejection of the petition.

8. This takes me to Section 138 of the N.I. Act. In orde