NI Act | Wife Not Liable For Dishonor Of Cheque Drawn By Husband On Couple's Joint Account: Punjab & Haryana High Court

The Punjab & Haryana High Court has ruled that a spouse will not be liable for dishonor of a cheque signed by the other spouse, merely because it was drawn on the couple's joint account.The observation came in response to the petitioner/wife's plea for quashing of a complaint under Section 138 of Negotiable Instruments Act ("NI Act"), stating that she was accused of cheque dishonor merely because the dishonored cheque, signed by her husband, was drawn on their joint account.Noting that the cheque was not signed by the petitioner, Justice N.S. Shekhawat said, “The petitioner was admittedly not the drawer. The mere fact that the petitioner happens to be the spouse of the co-accused is hardly sufficient to condemn her as co-accused with him. Even, from the scheme of the Act, it is apparent that there is no provision in the Act regarding taking cognizance against a person, other than the “drawer” of the cheque.”However, it was added that there was an exception to this. In case the person who committed the offence under Section 138 of the Act is a company, then the person in-charge of the company as well as the company shall be deemed guilty of the offence as provided under Section 141 of the Act.The court further explained that the words “such person shall be deemed to have committed the offence” used in Section 138 relate to the person who has drawn the cheque in favor of the payee. If the cheque in question is returned unpaid on account of the conditions mentioned under Section 138, such person alone is liable to be prosecuted for the offence.In its analysis, the Bench referred to Alka Khandu Avhad v. Amar Syamprasad Mishra, where the Apex Court held,"Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque.”Quashing the complaint as well as the summoning order qua the petitioner, the court concluded, "it would be safe to observe that the petitioner is not liable for the cheque drawn by her husband from the joint account relating to both of them. However, the proceedings may continue against Raman Kumar Arora, her husband, as he had signed the cheque in question."Advocate Karan Suneja appeared for petitionerAdvocate RK Chaudhary appeared for respondentCase Title: Shalu Arora v. Tanu Bathla, CRM M-21768-2022Citation: 2023 LiveLaw (PH) 249Click here to read/download order

NI Act | Wife Not Liable For Dishonor Of Cheque Drawn By Husband On Couple's Joint Account: Punjab & Haryana High Court

Aiman J. Chishti

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