Cheque dishonour liability cannot be fastened on a non-signatory joint account holder without statutory basis

Section 138 of the Negotiable Instruments Act, 1881 fastens liability on the drawer or signatory of the cheque, and criminal prosecution cannot be extended to a mere joint account holder unless statutory liability is made out under Section 141. Where the cheque bore only one signature and the accused was not the signatory, the basic ingredients of the offence were absent against her. The initiation or progress of trial did not cure that defect, so the proceedings were liable to be quashed.

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Issues: Whether proceedings under Section 138 of the Negotiable Instruments Act, 1881 could be quashed against a joint account holder who was not a signatory to the cheque.

Analysis: Section 138 of the Negotiable Instruments Act, 1881 creates liability for dishonour of a cheque drawn by the person maintaining the account and signed by that person. The rule is strictly applied, and criminal culpability does not extend to a mere joint account holder unless the case falls within the statutory contingencies recognized by Section 141 of the Negotiable Instruments Act, 1881. The material showed that the disputed cheques bore only one signature and the petitioner was not the signatory. The commencement of trial did not cure the absence of the basic ingredients of the offence against her.

Conclusion: The proceedings against the petitioner were liable to be quashed.

Ratio Decidendi: Under Section 138 of the Negotiable Instruments Act, 1881, prosecution lies only against the drawer or signatory of the cheque, and a mere joint account holder cannot be proceeded against in the absence of statutory liability under Section 141.

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