HONOURABLE SRI JUSTICE RAJA ELANGO CRIMINAL PETITION No.4488 OF 2008 Dated : 26.08.2010. Between : Smt.Supreet Kaur … Petitioner-A.3 a n d 1) M/s.Model Co-operative Urban Bank Ltd. 2) The State of A.P. … Respondents HONOURABLE SRI JUSTICE RAJA ELANGO CRIMINAL PETITION No.4488 OF 2008 ORDER: This Criminal Petition under Section 482 of the Code of Criminal Procedure (for short ‘Cr.P.C.’) is filed by the petitioner-A.3 seeking to quash the proceedings against her in C.C.No.31 of 2008 on the file of the XVIII Additional Chief Metropolitan Magistrate, Hyderabad. The case of the complainant-first respondent as per the private complaint filed under section 200 Cr.P.C. is that A.1 being M/s.Software Solutions duly represented by its Partner A.2 availed term loan of Rs.15 lakhs from the Complainant Bank, for which A.3 stood as guarantor agreeing to repay the loan amount in case of default by A.1 and A.2. Thereafter, A.1 and A.2 committed default in payment of instalments and fell due of an amount of Rs.14,51,573/- as on 30.09.2002, which the accused failed to pay in spite of several demands. As such, the complainant approached the Arbitrator i.e. Deputy Registrar of Co-operative Society, Ranga Reddy District East, who passed an award dated 28.01.2004 in case No.18/2004/G for an amount of Rs.14,51,573/- together with certain interest. Subsequently, A.2 and A.3 addressed a letter dated 11.02.2005 undertaking to pay a sum of Rs.5,58,000/- on 10.03.2005 and a further sum of Rs.5,58,000/- on 25.03.2005. Further, A.2 and A.3 issued cheques bearing Nos.266418 and 266419 dated 10.03.2005 and 25.03.2005 for Rs.5,58,000/- each drawn on Oriental Bank of Commerce, Bowenpally branch, Secunderabad, towards discharge of above said liability, which were dishonoured due to insufficient funds vide memos dated 14.03.2005 and 28.03.2005 respectively. In spite of issuance of statutory legal notice, accused failed to repay the amounts. Hence, the present complaint for the offence punishable under Section 138 of Negotiable Instruments Act. Heard. The learned counsel for the petitioner submitted that the petitioner is only a guarantor to the loan taken by A.1 and A.2 and she has not issued the cheque in her personal capacity. As such, the ingredients of Section 138 of the N.I. Act are not attracted. It is also submitted that in view of the award passed by the Arbitrator, the remedy of filing a civil suit for recovery of money is available to the complainant and in spite of the same the complainant has chosen to file this complaint against the petitioner only to harass her. Thus, he prayed to quash the proceedings against the petitioner. Learned counsel for the first respondent-complainant submitted that the act of issuance of cheque by the husband of the petitioner arose out of an award passed by an arbitrator, in which, the petitioner also a party and she was also made liable to pay the award amount. Further the petitioner stood as a guarantor to the loan availed by A.1 and A.2 and the bank account also stands in the name of the petitioner and her husband jointly. Thus, the petitioner is liable to face prosecution for the offence punishable under Section 138 of the N.I. Act. Now the point for consideration before this Court is ‘Whether the petitioner, who is not the signatory to the instrument concerned, can be prosecuted on the ground that the said account stands in the name of herself and her husband jointly?’ The facts that the instrument is not signed by the petitioner and the account stands in the name of the petitioner and her husband jointly are not in dispute. The offence punishable under Section 138 of N.I. Act will attract not only on the basis of liability to pay a sum of amount but also coupled with the fact that the instrument is issued by the person concerned. The case of the complainant that the petitioner is also liable to pay the said amount cannot be a ground to proceed against the petitioner when she is not a signatory to the instrument concerned. The same question was adjudicated and decided in T.N.Devi vs. A.C.Haridas and another[1] wherein its was held by the Kerala High Court that : 5. The mere fact that the petitioner happens to be the spouse of the 1st accused and the account can be operated by either of them cannot, according to me, make the petitioner culpably liable under Section 138 of the N.I. Act for a cheque issued by her husband to the complainant for the discharge of his liability. The averments in the petition clearly show that the petitioner had no liability; that she had not issued the cheque and that she has no personal obligation to discharge the liability to satisfy which the cheque was allegedly issued. The mere fact that the account cannot by any stretch of imagination invite culpable liability under Section 138 of the N.I. Act against the petitioner who was not the drawer and is only a joint account holder. 6. It is significant that the petitioner is not sought to be made liable with the help of Section 141 of the N.I. Act. A perusal of the complaint clearly shows that the petitioner is sought to be saddled with culpable liability on the sole ground that her husband had issued the cheque in question to discharge his liability and the cheque happens to be drawn on an account which can be jointly operated by the petitioner along with her husband. 7. It follows that sufficient grounds to proceed against the petitioner-2nd accused under Sec.138 of the N.I. Act are not revealed in the complaint and in the sworn statement given by the complainant. Consequently, the petitioner is certainly entitled to get the proceedings against her dropped invoking the dictum in K.M.Mathew (1992 Crl.L.J.3779) (SC). Notwithstanding the fact that the proceedings are in a summons case the petitioner is entitled to have the proceedings against her terminated by invoking the dictum in the said decision. She does not deserve to stand the trauma of this criminal prosecution. Dehors the provisions of the Code, she is entitled to be relieved of the unnecessary trauma. The challenge succeeds.” This Court is also of the view that the petitioner, being not a signatory to the instrument concerned, cannot be prosecuted for an offence punishable under Section 138 of the N.I. Act merely because she is the joint account holder. Hence, the present Criminal Petition is allowed and the further proceedings in C.C.No.31 of 2008 on the file of the XVIII Additional Chief Metropolitan Magistrate, Hyderabad, are hereby quashed to the extent of present petitioner-A.3 only. As far as the other accused are concerned, the trial Court is directed conclude the trial within a period of three months from the date of receipt of a copy of this order. _________________________ JUSTICE RAJA ELANGO Dated : 26.08.2010 Note : L.R. copy to be marked. B/o. sur [1] 2004 Crl.L.J.4710