{"id":290651,"date":"2023-04-26T18:00:41","date_gmt":"2023-04-26T12:30:41","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=290651"},"modified":"2023-05-03T08:58:33","modified_gmt":"2023-05-03T03:28:33","slug":"husband-cannot-be-summoned-in-cheque-bounce-case-for-cheque-issued-by-wife-as-sole-proprietor-of-a-firm-allahabad-high-court-legal-research-legal-news-updates","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/04\/26\/husband-cannot-be-summoned-in-cheque-bounce-case-for-cheque-issued-by-wife-as-sole-proprietor-of-a-firm-allahabad-high-court-legal-research-legal-news-updates\/","title":{"rendered":"Husband cannot be summoned in cheque bounce case for cheque issued by wife as sole proprietor of a firm: Allahabad High Court"},"content":{"rendered":"
\n

Allahabad High Court:<\/b> In an application under Section 482<\/a> of the Code of Criminal Procedure, 1973<\/a> to quash the entire criminal proceedings in criminal complaint case under Section 138<\/a> of the Negotiable Instruments Act, 1881<\/a>, Umesh Chandra Sharma, J. held that the courts below could not examine the material available on record and based on relation that no person can be prosecuted, hence quashed the impugned order.<\/p>\n

In the case at hand, the complainant instituted a complaint under Section 138<\/a> of the Negotiable Instruments Act, 1881<\/a> against the applicant and his wife, as the complainant used to make regular demand of arrears amount, for which no attention was paid by the applicant and his wife. However, lastly, they provided a cheque for the amount of Rs. 3,00,000, but when it was produced in Bank, the same was dishonored with the endorsement exceed arrangement.<\/p>\n

The applicant submitted that the cheque was issued by the firm through its’ proprietor (applicant’s wife). Further, the applicant’s name as a Proprietor, Director, Owner or otherwise of the firm is nowhere mentioned in the Tax Invoice, e-way Bill, GST documents. In fact, it is a proprietorship firm run by a single proprietor, the applicant’s wife. The applicant has no concern with the aforesaid firm, and he has been arrayed in the complaint with mala-fide intention to mount pressure for recovery of money being husband of the proprietor of the aforesaid firm. The applicant has no business concern with the aforesaid firm and works separately as sales agent in the grain market.<\/p>\n

The Court said that the court below totally failed in considering material available on record and has mechanically summoned the applicant under Section 138<\/a> of the N.I. Act<\/a> along with his wife. Thus, it was held that impugned order is arbitrarily, unjust, illegal and is not sustainable in the eye of law as the applicant has no concern with the aforesaid firm by legal and practical aspects.<\/p>\n

The Court said that the impugned cheque had been issued by the applicant’s wife, and there is no paper to establish that the applicant is an authorised signatory, agent or co-proprietor of the Firm. It is further said that in the eye of law, wife and husband have separate entity. It is also not the case that the wife, sole proprietor of the firm, had provided the cheque signed by or on behalf of the applicant.<\/p>\n

The Court relied on M. Seethalakshmi<\/i> v. Suresh Bafna<\/i>, 2005 SCC OnLine Mad 26<\/a>, wherein it was held that for the cheque issued by the husband for the loan obtained by him, and guarantee has been given by the wife, she cannot be made a party or an accused for the prosecution of the bounced cheque under Section 138 of the Act. Since the wife is not party to the issuance of the cheque.<\/p>\n

The Court said that in this case the sole proprietor, the wife, has issued the cheque and the applicant is neither the guarantor nor has acted in the capacity of authorised signatory or the agent of his wife.<\/p>\n

Further, after referring to various judgments, wherein it was held that when the accused was neither signatory to the cheques nor was in charge of day-to-day affairs of the firm, he would not be liable under Section 138<\/a> NI Act<\/a>1<\/sup><\/a>. Thus, it was held that the applicant cannot be summoned as accused under Section 138<\/a> of the NI Act<\/a> and the summoning order in respect of the applicant is bad in law.<\/p>\n

[Pawan Garg v State of U.P, 2023 SCC OnLine All 141<\/a>, decided on 18-04-2023<\/span>]<\/p>\n<\/div>\n\n

1.<\/a> P. Dhamodharan<\/i> v. Palani Andavar Mills Ltd.<\/i>, 2001 SCC OnLine Mad 944<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Allahabad High Court said that in the eye of law, wife and husband have separate entity. The present case is not a case that the wife, sole proprietor of the Firm had provided the cheque signed by or on behalf of the applicant<\/i><\/p>\n","protected":false},"author":67512,"featured_media":290504,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[2510,3029,57150,31572,30606,34853,32567],"class_list":["post-290651","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-Allahabad_High_Court","tag-cheque_bounce","tag-cheque-issued","tag-endorsement","tag-ni-act","tag-proprietor","tag-recovery-of-money"],"yoast_head":"\nHusband cannot be summoned in cheque bounce case for cheque issued by wife: Allahabad High Court | SCC Blog<\/title>\n<meta name=\"description\" content=\"Allahabad High Court held that husband cannot be summoned in cheque bounce case for 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Act, it is clear that if any invalid cheque is presented before the Bank and the same was dishonoured, then no liability under Section 138 of NI Act would be attracted, and the cheque of Allahabad Bank is invalid after 30-09-2021 after merging\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Allahabad High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Allahabad-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":292514,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/05\/18\/demand-notice-cannot-be-faulted-if-any-other-sum-indicated-in-addition-to-said-amount-under-ni-act-allahabad-high-court-legal-news\/","url_meta":{"origin":290651,"position":1},"title":"Demand notice cannot be faulted if any other sum indicated in addition to said amount under S. 138(b) of NI Act: Allahabad High Court reiterates","author":"Apoorva","date":"May 18, 2023","format":false,"excerpt":"Allahabad High Court reiterated that the demand notice should be read as a whole. In the demand notice, the holder or payee can demand to pay out for the said amount, i.e., cheque amount.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"allahabad high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":261806,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/02\/16\/dishonour-of-cheque-8\/","url_meta":{"origin":290651,"position":2},"title":"Can only a sole proprietor be held liable under S. 138 NI Act for dishonour of cheque drawn on account of sole proprietorship concern? Tis Hazari Court decodes","author":"Bhumika Indulia","date":"February 16, 2022","format":false,"excerpt":"Tis Hazari Courts, New Delhi: While deciding a matter under Section 138 of the negotiable Instruments Act, 1881, Devanshu Sajlan, MM-05 (NI Act) reiterated the settled position of law that there is no concept of vicarious liability in case of a sole proprietorship concern since a sole proprietorship concern does\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Tis-hazari","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":305440,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/10\/21\/allahabad-high-court-directs-magistrate-conclude-ni-act-proceedings-expeditiously-legal-news\/","url_meta":{"origin":290651,"position":3},"title":"Allahabad HC directs Magistrate to conclude NI Act proceedings expeditiously without going into unnecessary technicality","author":"Apoorva","date":"October 21, 2023","format":false,"excerpt":"Allahabad High Court noted that the Supreme Court has issued several directions to deal with the pendency of dishonor of cheque cases and for their expeditious disposal","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"allahabad high court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/04\/allahabad-high-court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":243703,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/02\/11\/madras-hc-if-wife-issues-a-cheque-to-discharge-husbands-liability-and-it-gets-dishonoured-can-the-wife-be-prosecuted-under-s-138-ni-act-hc-answers\/","url_meta":{"origin":290651,"position":4},"title":"Madras HC | If wife issues a cheque to discharge husband\u2019s liability and it gets dishonoured, can the wife be prosecuted under S. 138 NI Act? HC answers","author":"Bhumika Indulia","date":"February 11, 2021","format":false,"excerpt":"Madras High Court: P.N. Prakash, J., decided a criminal original petition addressing an issue with regard to an offence under Section 138 of Negotiable Instruments Act, 1881. Sree Gokulam Chits and Finance Corporation Private Limited initiated prosecution in the Court of Judicial Magistrate for the offence under Section 138 of\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":236302,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/09\/25\/all-hc-once-the-intention-of-the-party-is-clear-that-he-does-not-wish-to-make-payment-should-complainant-wait-for-15-days-to-file-a-complaint-for-dishonour-of-cheque-allahabad-hc-answers\/","url_meta":{"origin":290651,"position":5},"title":"All HC | Once the intention of the party is clear that he does not wish to make payment, should complainant wait for 15 days to file a complaint for dishonour of cheque? HC answers","author":"Editor","date":"September 25, 2020","format":false,"excerpt":"Allahabad High Court: In the instant case where the summoning order issued as per the requisites of Section 138 of Negotiable Instrument Act, 1881, was challenged as being \u2018bad in law\u2019 and the question arose that once the intention of the party is clear that he does not wish to\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/290651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67512"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=290651"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/290651\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/290504"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=290651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=290651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=290651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}