Section 138 NI Act: Can non-signatory to dishonoured cheque be prosecuted for being joint account holder? Supreme Court to examine

The Supreme Court last week agreed to examine whether a non-signatory to dishonoured cheque can be prosecuted for being joint account holder [K Venkidapathy & anr vs KS Senathypathy]. .A bench of Justices KM Joseph and BV Nagarathna issued notice in the petition challenging proceedings for dishonour of cheque due to insufficient funds against the issuer's joint account-holder who was not a signatory to the cheque."Issue notice confined to the special leave petition filed by second petitioner only in the application for condonation of delay as well as in the special leave petition. List on 21st April, 2023", the order said..The petition arose as a result of a Madras High Court order refusing to quash proceedings in the case on the ground that the petitioners had not disputed the cheque and the issue ought to be decided in trial. "The Hon'ble High court without going into the merits of the matter dismissed the petition on the ground that all the contentions raised by the petitioner is matter of trial," said the plea. .The first petitioner in the case is the owner of a cotton mill, while the second petitioner is his daughter. The respondent had lodged a complaint against both in 2016 under Section 138 of the Negotiable Instruments (NI) Act in connection with a ₹20 lakh loan payment.The two operated a joint account and the daughter was alleged to be present when the respondent received the amount though she was not a signatory to the cheque. .A post-dated cheque which was inclusive of the interest amount given by the petitioners, was subsequently dishonoured.The petitioners moved the High Court in 2018, seeking quashing of proceedings before a Coimbatore Magistrate, alleging that no loan was involved.The High Court in January this year refused to enter into the merits of the matter and dismissed the plea. This led to the present appeal before the top court..The petitioners argued that this order was against law settled by the apex court. To buttress this submission, reliance was placed on the judgment in the case of R Kalyani v Janak C Mehta where it was held that one of the paramount duties of superior courts is to see that a person who is apparently innocent is not subjected to persecution and humiliation on the basis of a false complaint..Therefore, they submitted that the High Court ought to have considered the substantial questions of law involved..While the Supreme Court refused to entertain the father's petition, it agreed to examine the daughter's appeal since she was not a signatory to the cheque. .The petitioners were represented by advocates B Ragunath and Sriram Parakkat. [Read Order]