Delhi High Court.
Delhi high court, joint-account holder has not signed the check, a case cannot be filed under Section 138 of the Negotiable Instruments Act.
The Delhi High Court stated that a case cannot be prosecuted under Section 138 of the Negotiable Instruments Act against a joint account holder until their signature is present on the check.
Cause Title: Neeta Gupta v. Suman Anand
The petitioner and the respondent had been friends for almost 15 years. The petitioner purportedly borrowed a friendly loan of 20,00,000/- rupees from the respondent and promised to repay it after resolving financial difficulties.
A Bench of Justice Manoj Kumar Ohri held, βin the present case, Section 141 of the NI Act is not attracted as the offence is not committed by a company. The petitioner has been impleaded in her individual capacity. The liability under Section 138 NI Act arises on account of dishonour of cheque issued for the discharge, in whole or in part of any debt or other liability. Further, for initiation of prosecution under Section 138 NI Act, a prior statutory notice is mandatorily required to be given to the drawer, to make good the payment of the amount mentioned in the cheque and only when the drawer receives a notice and fails to make the payment within the time provided by the Statute, does the dishonour become an offence.β
The loan was given through a cheque, which was later dishonored due to βstop payment.β
Advocate Mohit Chaudhary appeared for the Petitioner and Advocate Sanjay Gupta appeared for the Respondent.
The respondent sent a statutory demand notice under Section 138 of the NI Act, but the petitioner claimed not to have received it and denied any knowledge of the complaint until November 2022.
The petitioner denied the receipt of any summons and claimed that the subject check was issued by her deceased husband. She argued that the complaint is not maintainable as her signature is not on the check.
The court discussed the legal conditions for prosecution under Section 138 of the Negotiable Instruments Act and emphasized the significance of prior valid legal notices.
The court stated that the complaint should fail on a fundamental ground: the signature on the subject check was only done by the deceased husband of the petitioner, not by the petitioner herself. The court mentioned, βThe subject check, as recorded, was signed only by the deceased husband of the petitioner, Arvind Gupta. Although it is argued that the check was issued jointly from the account of Arvind Gupta and Neeta Gupta (the petitioner), it is true that the petitioner has not signed the said check.β
The Court cited previous Supreme Court judgments to support the argument that in the case of joint accounts, a joint account holder cannot be prosecuted unless the cheque is signed by every joint account holder.
The Court concluded that the criminal complaint against the petitioner was an abuse of process of law and orders the quashing of the complaint. The petition was allowed, and the pending application was disposed of as infructuous.
Ask for pdf from hereπ
