ORDER

K. SREENIVASA REDDY, J. –

This Criminal Petition, under Section 482 of the Code of Criminal Procedure 1973, is filed by A2 in C.C.No.97 of 2018 pending on the file of the Spl. Judicial Magistrate of First Class, Mobile Court, Chittoor, to quash the proceedings in the above Calendar Case.

2. Brief facts of the case are as follows;

The respondent No.1 herein filed complaint for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, the N.I. Act?) in the Court below against A1 and A2, who are husband and wife respectively. A2 is the petitioner herein. It is the case of the complainant/respondent No.1 herein that both A1 and A2 have jointly availed loans from it, on various dates from 13.9.2010 to 08.9.2012 to a tune of Rs.30,00,000/- (Rupees Thirty Lakhs only) in total and for the repayment of the same, they have executed a demand promissory note on 08.9.2012. On demand for repayment, the Accused No.1 who is the husband of A2 the petitioner herein issued a cheque for Rs.32,50,000/- (Rupees Thirty Two Lakhs Fifty Thousand only) drawn from their joint account maintained in Karoor Vysya Bank Limited on 12.8.2015. The said cheque when was presented by the complainant (R1 herein) in its bank for collection on 09.10.2015 for the second time, after it was returned unpaid earlier, it is once again returned with an endorsement “funds insufficient”. Later after complying with the essential conditions of Section 138 of the Negotiable Instruments, Act, the complainant filed the complaint against the petitioner (A2) and her husband (A1) for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, the N.I. Act?). The learned Magistrate by taking cognizance of the offence punishable under Section 138 of the N.I. Act registered the case in C.C.No.97 of 2018 and issued summons to the petitioner (A2) and her husband (A1).

3. Aggrieved by the order of issuing summons by taking cognizance of the offence punishable under Section 138 r/w 142 of the N.I. Act by the learned Magistrate against the petitioner herein, this quash petition is filed.

4. The main ground urged for the petitioner is that she is not signatory to the cheque, which was dishonoured and she also did not issue the said cheque and therefore the complaint as well as Calendar Case Proceedings are not maintainable against her.

5. Heard the learned counsel for the petitioner, learned counsel for the respondent No.1 and the learned Special Assistant Public Prosecutor for the respondent No.2.

6. Learned counsel for the petitioner contended that even if accepted the entire accusations are true, the offence under Section 138 of the N.I. Act is not attracted as against the petitioner herein for the reason that the petitioner is not a signatory to the dishonoured cheque. According to the complaint filed before the learned trial Court, it is A1 therein that issued the cheque but not the petitioner herein. Therefore, Section 138 of the N.I. Act is not attracted in this case since it reads that the person who issues the cheque for discharge of a legally enforceable debt alone would be liable for punishment if the said cheque is dishonoured. Therefore, he prays to quash the proceedings against the petitioner herein.

7. Learned counsel for the respondent No.1 submitted that the cheque dishonoured in this case was though signed by A1 who is none else than husband of the petitioner herein (A2), but it was towards discharge of a debt borrowed jointly by both the accused. It is also contended that the cheque was drawn from out of a joint account maintained by both the accused and as such in view of Section 141 of the N.I. Act, they come under the expression the, other association of individuals? found in the above provision. Therefore, both A1 and A2 who are the husband and wife respectively can be prosecuted and there is no illegality in proceeding against them under Section 138 of the N.I. Act by the learned trial Court. Hence, he prays to dismiss the petition.

8. Perused the record and considered the submissions made by both the learned counsel.

9. Section 138 of the Negotiable Instruments Act, 1881, reads as follows;

[ 138 Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by a person on an 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, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 19 [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless—

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20 [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation.— For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.]

10. The essential ingredient of Section 138 of the N.I. Act is that the cheque drawn should be in discharge of some debt or liability. A plain reading of the aforesaid provision goes to show that a person who is signatory to the cheque and the cheque drawn by that person on account maintained by him and the cheque issued for the discharge of either whole or in part, of any legally enforceable debt or other liability and the said cheque has been returned by the bank unpaid, then such person can be said to have committed the offence under Section 138 of the N.I.Act. It is pertinent to mention here that Section 138 of the N.I. Act does not speak about the joint liability. Apropos unless both the persons are liable to pay debt jointly, they cannot be prosecuted except when they maintained joint account and they both have drawn the cheque duly signed by them if it is dishonoured.

11. The Explanation appended to Section 138 of the Negotiable Instruments Act, 1881 gives the meaning of the expression “debt or other liability” for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The Explanation leaves no manner of doubt, that to attract an offence under Section 138, there should be a legally enforceable debt or other liability subsisting on the date of the drawal of the cheque. In other words, drawal of the cheque in discharge of an existing or past debt or liability is sine qua non for bringing an offence under Section 138 of the N.I. Act. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, the cheque cannot be held to have been drawn for an existing debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.

12. Learned counsel for the petitioner relied upon the judgment of the Hon’ble Supreme Court in ALKA KHANDU AVHAD VS AMAR SYAM PRASAD MISHRA AND ANOTHER¹ [¹(2021) 4 Supreme Court Cases 675] = 2021(2) L.A.R. 174 = (2021) Law Today Live Doc. Id. 16064, wherein it is held,

“Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person 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. Section 138 of the NI 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. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque.

Section 141 of the NI Act is relating to the offence by companies and it cannot be made applicable to the individuals. Learned counsel appearing on behalf of the original complainant has submitted that “Company” means anybody corporate and includes, a firm or other association of individuals and therefore in case of a joint liability of two or more persons it will fall within “other association of individuals” and therefore with the aid of Section 141 of the NI Act, the appellant who is jointly liable to pay the debt, can be prosecuted. The aforesaid cannot be accepted. Two private individuals cannot be said to be “other association of individuals”. Therefore, there is no question of invoking Section 141 of the NI Act against the appellant, as the liability is the individual liability (may be a joint liabilities), but cannot be said to be the offence committed by a company or by it corporate or firm or other associations of individuals. 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 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.”

13. Learned counsel for the petitioner also relied upon another the judgment of Hon’ble Apex Court in Aparna A. Shah Vs. M/s Sheth Developers Pvt., Ltd., and another² [²(2013) 8 SCC 71], wherein it is held,

22) In the light of the above discussion, we hold that under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the case on hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in- chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque.

23) We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to dishonour of a cheque can, in no case “except in case of Section 141 of the N.I. Act” be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act. Even the High Court has specifically recorded the stand of the appellant that she was not the signatory of the cheque but rejected the contention that the amount was not due and payable by her solely on the ground that the trial is in progress. It is to be noted that only after issuance of process, a person can approach the High Court seeking quashing of the same on various grounds available to him. Accordingly, the High Court was clearly wrong in holding that the prayer of the appellant cannot even be considered. Further, the High Court itself has directed the Magistrate to carry out the process of admission/denial of documents. In such circumstances, it cannot be concluded that the trial is in advanced stage.”

14. This Court also noticed a judgment of Telangana High Court in KODAM DANALAKSHMI VS STATE OF TELANGANA³ [³2021 SCC Online TS 1431], wherein it is held,

“ In Mrs. Aparna A. Shah's case (2 supra), cited by the learned counsel for petitioner/A.2, the Hon'ble Apex Court took the view that under Section 138 of the N.I. Act, it is only the drawer of the cheque who can be proceeded. In the said case, the husband had drawn the cheque on the account, which was being jointly maintained by him and his wife. The Hon'ble Supreme Court held that in case of issuance of a cheque from joint account, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who has a joint account holder. The Hon'ble Supreme Court observed as follows:

“Para 23 : We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to dishonour of a cheque can, in no case “except in case of Section 141 of the N.I. Act” be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act. Even the High Court has specifically recorded the stand of the appellant that she was not the signatory of the cheque but rejected the contention that the amount was not due and payable by her solely on the ground that the trial is in progress. It is to be noted that only after issuance of process, a person can approach the High Court seeking quashing of the same on various grounds available to him. Accordingly, the High Court was clearly wrong in holding that the prayer of the appellant cannot even be considered. Further, the High Court itself has directed the Magistrate to carry out the process of admission/denial of documents. In such circumstances, it cannot be concluded that the trial is in advanced stage.”

In the instant case, it is evident from the entire material placed on record, particularly, the complaints filed by the respondent No. 2/complainant under Section 138 of N.I. Act r/w Sec.200 Cr.P.C, the petitioner/A.2 is merely a joint account holder and she is not the signatory to the subject cheques. On the other hand, it is culled out from the record that though the account relating to the disputed cheques is a joint account, only one signature, which appears to be of A.1, are seen on those disputed cheques. Penal provisions should be construed strictly, but not in a routine/casual manner. The words used in Section 138 of N.I. Act that “such person shall be deemed to have committed an offence” refers to a person who has drawn the cheque, but not any other person, except the contingencies mentioned under Section 141 of the N.I. Act. In view of the same, the submission made by the learned counsel for the petitioner/A.2 that the petitioner/A.2, who is a mere joint account holder but not a signatory to the subject cheque, cannot be proceeded under Section 138 of N.I. Act, merits consideration, inasmuch as a joint account holder cannot be prosecuted, unless and until he/she is a signatory to the subject cheque. Further, the commencement of the trial in the subject C.Cs cannot be a ground to continue the proceedings against the petitioner/A.2. The Courts below erred in taking cognizance against the petitioner/A.2, particularly, when she is not a signatory to the disputed cheques. So the contentions raised on behalf of the respondents do not merit consideration. In view of these circumstances, when no ingredients under Section 138 of N.I. Act are made out against the petitioner/A.2, continuation of the subject proceedings against the petitioner/A.2 is abuse of process of law. Therefore, the proceedings in the subject C.Cs against the petitioner/A.2, are liable to be quashed.”

15. The contention of the learned counsel for the respondent No.1 is squarely answered by the Hon’ble Apex Court in the above referred cases and hence no further discussion is required.

16. Thus, in this case, though the dishonoured cheque was said to be drawn from the joint account of both the accused, it was signed only by A1 and not by the petitioner herein who is A2 in the complaint before the trial Court. Hence, the petitioner cannot be proceeded with for the offence under Section 138 of the N.I.Act by the complainant/R1 herein.

17. When the basic ingredients of the offence are missing in the complaint, then permitting such a complaint to continue and to compel the petitioner to rigmarole of criminal trial would be totally unjustified leading to abuse of process of law.

18. Therefore, the Criminal Petition is allowed and the proceedings against the petitioner (A2) in C.C.No.97 of 2018 pending on the file of the Spl. Judicial Magistrate of First Class, Mobile Court, Chittoor are hereby quashed.

Miscellaneous petitions pending, if any, in the Criminal Petition shall stand closed.

Petition allowed.

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