Husband Not Liable For Cheque Issued By Wife: Gujarat HC [Read Judgment]
The Gujarat High Court, in Harshad Manubhai Malavaiya vs State Of Gujarat, held that husband is not liable for a cheque issued by the wife in her personal capacity.In the instant matter, Justice JB Pardiwala examined the question whether the petitioner can be made vicariously liable under Section 138 for the cheque dishonoured which were issued by his wife in personal capacity.Relying on...
The Gujarat High Court, in Harshad Manubhai Malavaiya vs State Of Gujarat, held that husband is not liable for a cheque issued by the wife in her personal capacity.
In the instant matter, Justice JB Pardiwala examined the question whether the petitioner can be made vicariously liable under Section 138 for the cheque dishonoured which were issued by his wife in personal capacity.
Relying on the Supreme Court’s judgment in the matter of M/s Aparna A Shah vs M/s Sheth Developers Pvt Ltd and considering the language used in Section 138 and taking note of background agreement pursuant to which a cheque is issued by more than one person, this court held that it is only the "drawer" of the cheque who can be made liable for the penal action under the provisions of the NI Act.
The normal rule in the cases involving criminal liability is against vicarious liability. To put it clear, no one is to be held criminally liable for an act of another.
In the above judgment, the Supreme Court held that 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.
In other words, only the person who signs the cheque can be prosecuted for dishonour of cheque under Section 138 of the Negotiable Instruments Act.
Read the Judgment here.