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  • The Telangana HC has recently held in the case of Kodam Danalakshmi vs. State of Telangana that a joint account holder who is not a signatory to a disputed cheque will not be liable to be prosecuted under Section 138 NI Act.
  • In the instant case, the petitioner moved the HC under section 482 CrPC to quash the criminal proceedings instituted against her under 138 NI Act. the cheque was drawn by her husband with whom she held a joint account. It was argued that she was not a signatory to the same and should not be held liable.
  • The Counsel for the prosecution had relied on the decision laid down in Alka Khandu Avhad vs. Amar Syamprasad Mishra and ors. AIR 2021 SC wherein it was held that a mere joint holder but not a signatory would not be liable to be prosecuted under 138 NI Act.
  • The Court, relying on the aforementioned ruling of the Hon’ble Apex Court, observed that section 138 does not talk about joint liability. In case of individual persons, the person other than the one who was actually a signatory to the cheque can never be prosecuted under 138 NI Act. He may be liable to pay the debt jointly, but such a person cannot be held liable under the above mentioned section unless he was a signatory to the cheque.
  • The Hon’ble HC also relied upon the decision in Mrs. Aparna A. Shah vs M/s Sheth Developers pvt. Ltd. and anr. AIR 2013 SC where it was held that under 138 NI Act it is only the drawer who can be proceeded against in a court of law.
  • The petition was therefore allowed and the proceedings against the petitioner, who was the wife of the drawer, were quashed.
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