Cheque issued by wife, Husband is not liable!!

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.The Justice JB Pardiwala examined the question whether the petitioner can be made vicariously liable under Section 138 for the cheque dishonored 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 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 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 dishonor of cheque under Section 138 of the Negotiable Instruments Act.

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