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[Landmark Judgement] Alka Khandu Avhad V. Amar Syamprasad Mishra (2021) 

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Landmark Judgment Law Insider (1)

Published on: December 05, 2023 at 12:40 IST

Court: Honourable Supreme Court of India

Citation: Alka Khandu Avhad V. Amar Syamprasad Mishra (2021) 

Honourable Supreme Court of India has held that Section 138 of the Negotiable Instruments Act, 1881 cannot be invoked in cases of Joint Liability. It is held that in the case of a Joint Accounts individual persons such as family, 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 Negotiable Instruments Act, 1881.

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 such person must have been a signatory to the cheque.

12. Section 141 of the NI Act is relating to the offence by companies and it cannot be made applicable to the individuals. The learned counsel appearing on behalf of the original complainant has submitted that “company” means any body 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 read with Section 141 of the NI Act. The criminal complaint filed against the appellant for the offence punishable under Section 138 read with 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.

Drafted By Abhijit Mishra