The Punjab and Haryana High Court ruled that the wife cannot be held accountable under Section 138 of the Negotiable Instruments Act for a cheque issued by her husband from their shared account.

The Court, in dismissing criminal proceedings against the Wife, highlighted that the legal provision pertains solely to the drawer of a dishonoured cheque who fails to fulfill payment obligations.

Justice NS Shekhawat's bench emphasized, "Considering the circumstances, it's evident that the petitioner holds no liability for the cheque drawn by her husband from their joint account."

Advocate Karan Suneja appeared for the Petitioners and Advocate RK Chaudhary appeared for the Respondent.

The Petitioner invoked Section 482 of the Code of Criminal Procedure, 1973 (CrPC) to quash criminal proceedings under Section 138 of the NI Act. Her husband issued a cheque of Rs. 5,00,000/- that bounced due to insufficient funds, prompting the payee (Respondent) to file a complaint under Section 138.

The Petitioner argued that she couldn't be prosecuted as she didn't issue or sign the cheque. The Court concurred, stating that Section 138 only applies to the drawer who defaults on payment after the cheque bounce, absolving the Petitioner as she wasn't the cheque's drawer.

The Bench emphasized that the mere status of being the spouse of the co-accused doesn't establish liability for the offense. It pointed out that an exception exists when the drawer of the cheque is a company, in which case both the person in charge of the company and the company itself can be held accountable.

Furthermore, citing the case of Aparna A Shah v M/s Sheth Developers P. Ltd, the Court reaffirmed that the Petitioner isn't accountable for the cheque drawn from their joint account by her husband. However, the Court upheld the proceedings against her husband, who had signed the cheque. Consequently, the Court granted the Petition, terminating the criminal proceedings against the Petitioner.

Accordingly, the Court accepted the Petition and quashed the criminal proceedings against Petitioner.

Case Title: Shalu Arora v Tanu Bathla (2023:PHHC:152038)

Click here to Read/Download the Order