Liability for prosecution under Section 138 of Negotiable Instruments Act, 1881

A liability under Section 138 of the Negotiable Instruments Act, 1881 is fastened on a person who is signatory to the cheque and cheque is drawn by that person on an account maintained by him. And the cheque has been issued for the discharge of liability. The discharge is in whole or in part of any liability. The said cheque relating to discharge of liability has been returned by the bank as unpaid and only such person can be said to have committed the offence. Section 138 of the NI Act does not speak about the joint liability. Even in the case of joint liability, in case of individual persons, such a person cannot be prosecuted under Section 138 of the NI Act. He or she can be held jointly responsible, if the other person has executed the cheque and the account is also jointly maintained. The Honourable apex court further held that section 141 of the NI Act is not applicable to individuals as it deals with offences by companies. The judgement has been delivered by the Honourable Supreme Court of India on 8^th of March, 2021 in a case titled as Alka KhanduAvhad Vs Amar Syamprasad Mishra & Anr Criminal Appeal No.258/2021.

Category: JUDGEMENTSBy Hind Advocates March 9, 2021 Leave a comment

Author: Hind Advocates

Hind Advocates is a group of lawyers operating in High Court of Punjab & Haryana at Chandigarh. It provides Corporate legal advices and handles client cases in all subjects such as civil and criminal, arbitration, services and labour laws.

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Liability for prosecution under Section 138 of Negotiable Instruments Act, 1881

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