My father had given a joint account cheque as a surety/guarantee for a home loan that his friend had taken. This cheque belonged to a joint account that he held with his wife (my mother). Now the loan was not paid in time, so the bank sold the attached property to recover the loan principal etc.
In fact we are aware that there was an excess amount after the sale of the property and this excess amount was credited to the borrower's account. But the bank has also gone ahead in encashing the cheque, which my father gave as a surety. This cheque bounced and hence a case was filed against my father as the primary accused person, and my mother as co-accused even though she had not signed as a guarantor or on the cheque.
I wanted to understand whether 138 NI act holds good here since the cheque was not given to discharge a liability but just as a surety. Also, what could be the potential consequences to the prime accused in such cases?
Request your kind advice in this regard.
Thank you in advance for your help!