Case Note & Summary
The petitioner, Dr. Manjula Shetty, was arrayed as accused No. 2 in C.C. No. 5254/2012 pending before the XVI Additional Chief Metropolitan Magistrate, Bengaluru, for an offence under Section 138 of the Negotiable Instruments Act, 1881. The complaint was filed by the respondent, Dr. C.G. Ananda Rao, against the petitioner and her husband, Dr. Vishwas Shetty (accused No. 1). The cheque in question was drawn by Dr. Vishwas Shetty on a joint account held by both accused, which was operable as 'Either or Survivor'. The petitioner did not sign the cheque. Despite this, cognizance was taken and summons were issued against her. The petitioner filed a petition under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the proceedings. The court considered the definition of 'drawer' under Section 7 of the Negotiable Instruments Act, which states that the maker of a cheque is the drawer. Since the petitioner did not make or sign the cheque, she could not be considered a drawer. The court held that only the drawer of a cheque can be prosecuted under Section 138 for its dishonour. The fact that the account was a joint account operable as 'Either or Survivor' did not make the petitioner liable, as she was not the drawer. The court allowed the petition and quashed the proceedings against the petitioner.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Liability of Joint Account Holder - The petitioner, a joint account holder, was not the drawer of the cheque as she did not sign it; the cheque was drawn by her husband, the first accused. The account was operable as 'Either or Survivor'. The court held that only the drawer of the cheque can be prosecuted under Section 138, and a joint account holder who is not a drawer cannot be held liable. The proceedings against the petitioner were quashed. (Paras 1-5)
B) Criminal Procedure Code - Inherent Powers - Section 482 Cr.P.C. - Quashing of Proceedings - The High Court exercised its inherent powers under Section 482 Cr.P.C. to quash the proceedings against the petitioner, as the complaint did not disclose any offence against her under Section 138 of the Negotiable Instruments Act, 1881. (Paras 1-5)
Issue of Consideration
Whether a joint account holder who did not sign the cheque can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, when the cheque was drawn by the other joint account holder on a joint account operable as 'Either or Survivor'.
Final Decision
The petition is allowed. The proceedings in C.C. No. 5254/2012 pending on the file of the XVI Additional Chief Metropolitan Magistrate, Bengaluru, are quashed as against the petitioner.
Law Points
- Drawer of cheque is essential for liability under Section 138 NI Act
- Joint account holder not drawer if not signed cheque
- 'Either or Survivor' mandate does not create liability for non-drawer
Case Details
2015 LawText (KAR) (04) 97
Criminal Petition No. 1828/2012
Sri M.T. Nanaiah (Senior Advocate), Sri Prabhugoud B. Tumbigi (Advocate) for petitioner; Sri Kashyap N. Naik (Advocate) for respondent
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Nature of Litigation
Criminal petition under Section 482 Cr.P.C. to quash proceedings in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
The petitioner sought quashing of the proceedings in C.C. No. 5254/2012 pending before the XVI Additional Chief Metropolitan Magistrate, Bengaluru, and dismissal of the complaint against her.
Filing Reason
The petitioner was arraigned as accused No. 2 in a complaint for dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881, even though she was not the drawer of the cheque.
Previous Decisions
Cognizance was taken and summons were issued against the petitioner by the trial court.
Issues
Whether a joint account holder who did not sign the cheque can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, when the cheque was drawn by the other joint account holder on a joint account operable as 'Either or Survivor'.
Submissions/Arguments
The petitioner's counsel argued that the petitioner was not the drawer of the cheque as she did not sign it, and therefore cannot be prosecuted under Section 138 of the Act. The cheque was drawn by the first accused on a joint account operable as 'Either or Survivor'.
The respondent's counsel argued in support of the complaint.
Ratio Decidendi
Only the drawer of a cheque can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881. A joint account holder who is not the drawer, i.e., who did not sign the cheque, cannot be held liable for its dishonour, even if the account is operable as 'Either or Survivor'.
Judgment Excerpts
This petition was filed to quash the proceedings in C.C.No.5254/2012, as against the petitioner, pending on the file of the XVI Additional Chief Metropolitan Magistrate, Bengaluru.
Drawer of the cheque, which is the subject matter of C.C.No.5254/2012 is Dr. Vishwas Shetty.
Despite the cheque having been drawn only by the first accused, petitioner having been included as the second accused, cognizance having been taken and summons having been issued, this petition was filed under Section 482 Cr.P.C., for grant of the relief, mentioned supra.
Sri M.T. Nanaiah, learned Senior Advocate, contended that though the cheque was drawn on a joint account to be operated as 'Either or Survivor', as the petitioner was not the drawer of the cheque and in view of Section 7 of the Act, defining the word 'drawer', the petitioner cannot be prosecuted.
In the instant case, the drawer of the cheque is the first accused. The petitioner is not the drawer of the cheque. Hence, the proceedings against the petitioner cannot be continued.
Procedural History
The respondent filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, against the petitioner and her husband (accused No. 1) in C.C. No. 5254/2012 before the XVI Additional Chief Metropolitan Magistrate, Bengaluru. The trial court took cognizance and issued summons against both accused. The petitioner then filed Criminal Petition No. 1828/2012 under Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the proceedings against her.
Acts & Sections
- Negotiable Instruments Act, 1881: Section 138, Section 7
- Code of Criminal Procedure, 1973: Section 482
