Husband Undertaking To Pay Business Liability Doesn't Exonerate Wife From Cheque Bounce Trial: P&H High Court
The Punjab and Haryana High Court has refused to quash proceedings under Section 138 of the Negotiable Instruments Act, 1881 against a woman accused alongside her husband, holding that a Special Power of Attorney authorising him to act on her behalf, and to have his acts ratified as her own, could not be sidestepped merely because a subsequent settlement agreement recorded that his company would discharge the outstanding amount. [2026 LiveLaw (PH) 296]
Justice Alok Jain observed that the petitioner "on one hand wishes to take benefit of the said agreement, whereas, on the other hand does not wish to discharge her liability."
The petitioner, proprietor of a firm, and her husband, a Director of IQ Med Healthcare Private Limited, had business dealings with the respondent, with liabilities owed to him by both the firm and the company.
A one-time settlement dated 22.08.2023 was arrived at, Clause 1.1 of which recorded that ₹85,00,000 would be paid "by Second Party to the First Party" and that "the above said outstanding amount will be paid in totality by IQ Med Healthcare Pvt Ltd on behalf of both the firms."
On dishonour of the cheque issued pursuant to this arrangement, a complaint was filed, and the Judicial Magistrate 1st Class, Karnal summoned both the petitioner and her husband to face trial under Section 138. The petitioner sought quashing of the complaint and the summoning order under Section 528 BNSS.
Counsel for the petitioner argued that since the company and her husband had undertaken to discharge the liability jointly under the settlement, she could not be compelled to face criminal proceedings, pointing to the complainant's own averment in paragraph 6 of the complaint, which stated that the husband (accused No. 1) had acknowledged responsibility for the outstanding amount against the petitioner's firm, so that no legally enforceable debt survived qua her. Reliance was also placed on an order in another complaint where the complainant himself had sought summoning of only the cheque-signatory.
For the respondent, it was submitted that the petitioner had approached the Court without clean hands, having concealed the Special Power of Attorney executed by her in favour of her husband, under which she had specifically agreed to ratify all acts, deeds and things lawfully done by him on her behalf — so that his acts were to be treated as her own.
It was argued that discharging the petitioner would allow the husband to later contend that the very entity against whom the liability was due stood discharged, collapsing the litigation altogether. It was further submitted that the statutory ingredients of Section 138 were satisfied, that disputed questions of fact could not be resolved in Section 528 BNSS proceedings without conducting an impermissible "mini-trial," and that the interim protection granted to the petitioner had itself stalled the trial.
The Court observed that the petitioner and her husband, having created two separate entities, her proprietorship and his private limited company — both of which had business dealings with the respondent, could not now use the settlement selectively: claiming its benefit while disowning the underlying liability it was meant to settle.
It further observed that the petitioner remained an important party to the proceedings, since the complainant would have to rely on his business dealings with her in order to establish the legally enforceable debt.
Holding that granting relief to the petitioner at this stage "would amount to interfering with and prejudging the issues involved in the trial," the Court declined to go behind the summoning order.
It also noted that despite being repeatedly called upon to demonstrate her bona fides by making some effort toward discharging the liability, counsel for the petitioner had "categorically declined to do so."
Finding no merit in the petition, the Court dismissed it, leaving the parties to have the disputed questions, including the effect of the settlement and the Special Power of Attorney resolved at trial.
Title: Tripti Srivastava and another v. Yogesh Singla
Appearances: Mr. Nitin Sansanwal and Mr. Keshav Pratap Singh, Advocates for the petitioners; Mr. Pratham Bali, Advocate for the respondent.