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2005(1) Bankmann 155
KERALA HIGH COURT
R. Basant, J.
T.N. Devi — Appellant
versus
A.C. Haridas & Another
— Respondents
Crl. R.P. No. 1540 of 2004
Decided on 19.8.2004
IMPORTANT POINT
Mere joint account-holder cannot be said liable under Section 138 of Negotiable Instruments Act.
Headnote:Negotiable Instruments Act, 1881—Section 138—Dishonour of cheque—Liability of joint account holder—Account maintained by husband and wife—Cheque issued by husband—Averments in the complaint clearly reveal that petitioner wife had no liability—Mere fact that petitioner being a joint account holder cannot be saddled with liability—Even sworn statement of complainant do not disclose any ground to proceed against petitioner—Petitioner entitled to get the proceedings against her dropped.
Held: The mere fact that the account can be operated jointly by both the accused cannot by any stretch of imagination invite culpable liability under Section 138 of the Negotiable Instruments Act, against the petitioner who was not the drawer and is only a joint account holder.
It follows that sufficient grounds to proceed against the petitioner -2nd accused under Section 138 of the Negotiable Instruments Act are not revealed in the complaint and the sworn statement given by the complainant. Consequently, the petitioner is certainly entitled to get the proceedings against her dropped. (Paras 5, 7)
Result: Petition allowed.
R. Basant, J.:—Is a person who has not signed the cheque, nevertheless a joint holder of the account which can be operated by any of the account holders, culpably liable under Sec. 138 of the Negotiable Instruments Act? This is the short question that arises for determination in this revision petition.
2. The petitioner a woman, has a joint account with the bank. She and her husband are competent to operate the account separately. The cheque in question was issued by her husband, (the 1st accused). Such cheque was issued to the complainant for the discharge of a liability of the 1st accused. The cheque was dishonoured on the ground of insufficiency of funds. Notice of demand issued to both the accused did not succeed in securing payment. The petitioner herein the (2nd accused) specifically asserted in the reply notice that she has no liability under Section 138 of the Negotiable Instruments Act. The complainant filed a private compliant to initiate criminal proceedings against both the accused under Section 138 of the Negotiable Instruments Act. The learned Magistrate took cognizance. The petitioner rushed to this Court with Crl. M.C. No. 3720/01 to quash the proceedings against her. That petition was dismissed with the observation that the petitioner must urge the relevant contentions before the Court before which the complaint was pending. The petitioner raised this contention before the learned Magistrate and claimed that proceedings against her may be dropped invoking the dictum in K.M. Mathew v. State of Kerala1. Her prayer was rejected. It is against this Order that the petitioner has come before this Court.
3. A look at the law first Section 138 of the Negotiable Instruments Act reads as follows :
“138.Dishonour of cheque for in-sufficiency, etc., of funds in the account. Where any 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 out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this Section shall apply unless–
(a)the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation:—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”
(emphasis supplied)
It is evident from a plain reading of the Section that in Order to be deemed to be liable under Section 138 of the Negotiable Instruments Act the cheque must be one drawn by the indictee on an account maintained by him. He becomes liable only if he, the drawer of the cheque, is given notice as insisted by Section 138(b) of the Negotiable Instruments Act and he, the drawer, does not make payment within the period stipulated under Section 138(c) of the Negotiable Instruments Act. The conclusion
