In the banking system, having a joint bank account for saving’s purpose is quite popular with the general public as it gives the liberty to persons who wish to share financial responsibilities with their known people. This kind of scheme is generally used by married couples in India.

What happens though, when a cheque is drawn from the joint bank account for a legally payable debt and the said cheque unfortunately gets dishonoured. Will both the individuals holding the said Joint Account be held liable for prosecution under Negotiable Instrument Act (‘NI Act’) proceedings?

This legal question was recently brought before the attention of the High Court of Punjab and Haryana (P&H HC) and the P&H HC gave its answer, which is summarized hereunder.

A petition was filed under Section 482 of CrPC by a wife seeking quashing of complaint registered against her under NI Act and summoning order, pending adjudication before the trial court in Mohali.

The Petitioner’s case was that, an NI Act Complaint under Section 138 was filed against her and her husband by the Respondent to whom a legally payable debt of Rs. 5 Lakhs was owed by the Petitioner and her husband, with whom she shared a joint bank account. Upon discharging the liability by issuing a cheque, upon presentation of the same by the Respondent, the said cheque got dishonoured due to reason of “Insufficient Fund”. It is important to note that, the said dishonoured cheque was signed by the Petitioner’s husband. Resultantly, the Respondent filed a complaint under Section 138 of NI Act against both the Petitioner and her husband. The Trial Court thereafter, took due cognizance over the Complaint and summons were issued to both the accused.

The Petitioner challenged the summoning order mainly on the ground that she was impleaded as an accused in the present case only on the ground that the she and her husband were joint account holders in the bank account, from which, the said cheque was issued, whereas, the Petitioner was not the signatory to the cheque in question. On this front, the Petitioner relied on 2 decisions rendered by the Hon’ble Supreme Court i.e., Aparna A Shah vs. M/s Sheth Developers P. Ltd. and Anr[1] and Alka Khandu Avhad vs. Amar Syamprasad Mishra[2] to argue that, the drawer of the cheque is the one, who could be prosecuted. 

Interestingly, in the present case, it was an admitted fact that, the Petitioner was not the drawer of the dishonoured cheque, but it was her husband and the Trial Cour by ignoring the settled law, wrongly summoned the Petitioner Wife. The Respondent side though, was not in a position to oppose the aforementioned factual scenario. 

The P&H HC before arriving at it conclusion referred in minute detail pertaining to the provision of Section 138 of NI Act and also read through the definition of a “Drawer”, “Drawee” in terms of Section 7 of the NI Act. The Court also went through the decided judgements by the Hon’ble Supreme Court on this aspect where a joint bank account and a dishonoured cheque and a single signatory was involved insofar as deciding whether both the account holders could be arrayed as accused in 138 NI Act proceedings.

Ultimately, the P&H HC came to the conclusion that, “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.”

Furthermore, the P&H HC concurred with the views held by the Hon’ble Supreme Court on this issue stating that, 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.

In light of the abovementioned decisions and the provisions of the NI Act, the Court allowed the present petition and quashed the complaint proceedings and the summoning order with respect to the Petitioner Wife only.

[1] 2013 (8) SCC 71

[2] 2021 (4) SCC 675