Husband Cannot Be Summoned As Accused Under Section 138 NI Act Where Cheque Was Issued By Wife As Sole Proprietor Of A Firm: Allahabad HC

The Allahabad High Court has termed an Order of the Subordinate Court as arbitrary whereby a man was summoned as accused in a cheque bounce case where the cheque was issued by his wife as sole proprietor of a firm.

“The impugned order is arbitrarily, unjust, illegal and is not sustainable in the eye of law. The applicant has no concern with the aforesaid firm by legal and practical aspects.”, the bench of Justice Umesh Chandra Sharma observed.

In this case, a complaint was lodged under Section 138 of the NI Act, against the applicant-husband and his wife and M/s Aircan Galary through its sole Proprietor (wife of the applicant) after a cheque of Rs 3 Lakhs signed by the wife of the applicant came to be dishonoured with the endorsement exceed arrangement.

It was alleged by the complainant that they had given the cheque intentionally to deceive the complainant. Thereafter the applicant and his wife were summoned by the concerned court as proprietor under Section 138 of the NI Act.

Advocate Shyam Shankar Mishra appeared for the applicant and AGA Pankaj Tripathi appeared for the State

On perusing the papers available on record, the High Court noted that only the wife of the applicant is the sole proprietor of M/s Aircon Gallery and the applicant-husband is neither the Proprietor, Co-proprietor or the Authorised Officer or Signatory Owner or the principal officer of the aforesaid firm.

“The impugned cheque had been issued by Kajal Garg, opposite party no. 3, the sole proprietor of opposite party no. 1 of the complaint. There is no paper to establish that the applicant is authorized signatory, agent or co-proprietor of the Firm. In the eye of law, wife and husband have separate entity. It is also not a case that the wife, sole proprietor of the Firm had provided the cheque signed by or on behalf of the applicant.”, the Court said.

Thus, the Court held that the applicant-husband cannot be summoned as accused under Section 138 of the NI Act and that the summoning order in respect of the applicant is bad in law.

Accordingly, the Court set aside the impugned Order so far as it related to the husband.

Cause Title- - Pawan Garg v. State of U.P. and Another

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