Only the drawer of a cheque can be prosecuted under Section 138 of the NI Act; a joint account holder is not liable unless they signed the cheque.

ORDER

This criminal original petition has been filed to quash the proceedings in STC.No.3203 of 2022 on the file of the Judicial Magistrate No.III, Puducherry.

2. The petitioner is the second accused in the complaint lodged by the first respondent for the offence punishable under Section 138 of NI Act on the allegation that the petitioner and the second respondent had jointly borrowed a sum of Rs.18,00,000/- on 28.04.2019 for development of business and also for their family expenses. Both the accused assured the first respondent that the amount would be returned within three months for which they jointly handed over cheques dated 31.07.2019. On instruction, the cheques were presented for collection on 31.07.2019. However, all the cheques were returned dishonoured for the reason ‘funds insufficient’.

3. The learned counsel appearing for the petitioner would submit that the petitioner is arrayed as the second accused. Though cheques were issued from the joint account, the petitioner did not sign the cheques. The cheques were issued without the knowledge of the petitioner herein in favour of the first respondent. In fact, the petitioner and the second respondent got separated long back and utilising the said circumstances, the second accused signed the cheques and issued in favour of the first respondent from the joint account of the petitioner and the second respondent herein. After coming out from the matrimonial home, the petitioner also issued public notice in ‘Dinamalar’, a Tamil daily dated 27.04.2019 that any transaction of the second respondent would not bind the petitioner and would not bind the property of her parents and she would not be held liable for any transaction of the second respondent herein. Further, on receipt of the statutory notice, the petitioner had sent a detailed reply notice dated 22.08.2019. Even without considering the same, the first respondent initiated proceedings under Section 138 of NI Act. In support of his contention, the learned counsel appearing for the petitioner relied upon the judgment of the Hon’ble Supreme Court of India in the case of Aparna A.Shah Vs. Sheth Developers Private Limited reported in (2013) 8 SCC 71, in which it is held as follows:

25) In Smt. Bandeep Kaur vs. S. Avneet Singh, (2008) 2 PLR 796, in a similar situation, learned Single Judge of the Punjab and Haryana High Court held that in case the drawer of a cheque fails to make the payment on receipt of a notice, then the provisions of Section 138 of the Act could be attracted against him only. Learned Single Judge further held that though the cheque was drawn to a joint bank account which is to be operated by anyone, i.e., the petitioner or by her husband, but the controversial document is the cheque, the liability regarding dishonouring of which can be fastened on the drawer of it. After saying so, learned Single Judge accepted the plea of the petitioner and quashed the proceedings insofar as it relates to her and permitted the complainant to proceed further insofar as against others.

26) In the light of the principles as discussed in the earlier paras, we fully endorse the view expressed by the learned Judges of the Madras, Delhi and Punjab &

Haryana High Courts.

27) In the light of the above discussion, we hold that under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the case on hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in- chief of the complainant and a bare look at the cheque would show that th