Joint Account Holder Who Is Not A Signatory To Cheque Shall Not Be Prosecuted Under Section 138 Of NI Act: Telangana High Court

In a case pertaining to dishonor of cheque, the Telangana High Court recently ruled that a joint account holder who is not a signatory to the disputed cheque shall not be prosecuted under Section 138 of Negotiable Instrument Act, 1981. Relying on the Supreme Court ruling in Alka Khandu Avhad vs. Amar Syamprasad Mishra, Justice Shameem Akhtar held that a mere joint account holder but not a signatory cannot be prosecuted under Section 138 of NI Act, unless and until his/ her signatures are on the cheque. Facts A joint account holder/Petitioner moved the High Court by filing a Criminal petition under Section 482 of the Code of Criminal Procedure, 1973 to quash the trial proceedings against her in criminal cases registered pursuant to dishonor of a cheque drawn by her husband, with whom she held a joint account. As per the provision, where any cheque drawn by a person on account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge of any debt, is returned by the bank unpaid, because the account has insufficient funds to honour the cheque, such person shall be deemed to have committed an offence and is punishable under Section 138 of the Negotiable Instrument Act.