Can a Joint Account Holder Prosecuted under Sec-138 NI Act ?

A division bench of Justice BV Nagarathna and Justice Ujjal Bhuyan opined that Court cannot decide on the legality of the proceedings of such nature in a petition seeking quashing of the same. 

The petitioner-woman used to operate a joint bank account with her father, from which a cheque went dishonoured. While keeping the question of law open, Justice Nagarathna explained that the same is valid but cannot be a ground of relief in the present petition.

The petitioner-woman is the daughter of a mill honour who is an accused in Sec-138 NI Act proceedings after a cheque meant to clear alleged loan dues of ₹10 Lakh bounced. The account was jointly owned and the daughter was later made co-accused, however, she didn’t sign the cheque that went dishonoured. 

The mill owner and his daughter moved to the High Court in 2018 seeking the quashing of proceedings before a Magistrate. The High Court refused to go into the merits and dismissed the petition. Consequently, the daughter moved Supreme Court.

The Supreme Court has left the question of law open as to whether a non-signatory to a dishonoured cheque be prosecuted under Section-138 NI Act for being a joint account holder as it allowed proceedings to continue in one such case.

The Top Court had earlier in March issued a notice in one such related matter wherein a similar question of law aroused after Madras High Court refused to quash the proceedings against the joint account holders on the ground that the issue ought to be decided in trial.