No joint liability under Section 138 Negotiable Instruments Act unless the account on which cheque was drawn is jointly maintained: Supreme Court

The Supreme Court on Monday ruled that even if a person owes payment to another jointly with someone else, he/she cannot be held liable under Section 138 of the Negotiable Instruments Act unless the account on which the cheque was drawn is jointly maintained and that person was a signatory to the cheque. .The Bench of Justices DY Chandrachud and MR Shah was considering an appeal by a woman who had challenged the complaint against her by a lawyer who held her jointly responsible along with her husband for the bounced cheque drawn to make payment for legal services rendered..The accused-wife had approached the Bombay High Court seeking to quash the criminal complaint filed against her primarily on the ground that she was neither a signatory to the cheque of Rs 8.62 lakh which was dishonoured nor was she a joint bank account holder of the concerned account. This petition was dismissed by the Bombay High Court leading to the present appeal before the top court. .The Supreme Court noted that when a person who is a signatory to a cheque draws it on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, "such person can be said to have committed an offence". .However the bench ruled that "Section 138 of the Negotiable Instruments 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," the Court said. A person might have been jointly liable to pay the debt, but such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account on which cheque is issued is jointly maintained and that person was a signatory to the cheque, the Court explained. .The court also ruled that two private individuals cannot be said to be "other association of individuals" and, therefore, there is no question of invoking Section 141 of the NI Act.."The appellant herein is neither a Director nor a partner in any firm who has issued the cheque. Therefore, even the appellant cannot be convicted with the aid of Section 141 of the NI Act. Therefore, the High Court has committed a grave error in not quashing the complaint against the appellant for the offence punishable under Section 138 r/w Section 141 of the NI Act. The criminal complaint filed against 8 the appellant for the offence punishable under Section 138 r/w Section 141 of the NI Act, therefore, can be said to be abuse of process of law and therefore the same is required to be quashed and set aside," ruled Supreme Court. .[Read Judgment]