The Allahabad High Court has stated that a husband cannot be called an accused for a violation under Section 138 of the Negotiable Instruments Act if his wife, who is the sole proprietor of a business, issues the cheque.
A single-judge bench of this Court comprising Justice Umesh Chandra Sharma's bench allowed the application submitted by the petitioner Pawan Garg, requesting that the court's summoning order be revoked. This Court declared that “the applicant cannot be summoned as an accused under Section 138 of the NI Act, and the summoning order related to the applicant is invalid in the law given the present facts”.
Brief Facts:
This application was filed by the application to quash the entire criminal proceedings under Section 138 N.I Act. In August 2020, the firm M/s Aircon Gallery issued a cheque of Rs. 3 lahks to the second party for their fabrication work, with the cheque being issued by proprietor Smt. Kajal Garg. When the second party presented the cheque at the bank on September 1, 2020, it was dishonored with the reason being "exceeds arrangement”. The second party followed the necessary steps and issued notices to the partnership firm and its proprietor Kajal Garg as per the NI Act, but no payment was made, and thus he filed a complaint with the court. On August 12, 2021, the court summoned Pawan Garg and Kajal Garg as proprietors under Section 138 of the NI Act. However, Pawan Garg challenged this order and claimed that he is not a proprietor, director, owner, or any other position at the firm M/s Aircon Gallery.
Contentions of the Applicant:
The learned Counsel for the Applicant contended that the firm in question is solely owned and operated by Kajal Garg, who is his wife. He further claimed that he has no involvement with the firm and was included in the complaint with an ill-intention to pressure him to recover the money owed due to his relationship with Kajal Garg.
Observations of the Court:
The court observed that the available documents confirm that Kajal Garg is the only proprietor of M/s Aircon Gallery, and Pawan Garg, the applicant, is not involved as the proprietor, co-proprietor, authorized officer, signatory owner, or principal officer of the firm.
The court further noted that the proprietor of M/s Aircon Gallery, Kajal Garg, who is the applicant's wife, issued the cheque and that the applicant did not act as the authorized signatory, agent, or guarantor. In the eye of the law, the wife and husband have separate entities. 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. Therefore, the court concluded that the applicant, being the husband of the sole proprietor of the firm, cannot be summoned under Section 138 of the NI Act as an accused. As a result, the court quashed the summoning order in regard to the applicant.
The decision of the Court:
The Allahabad High Court, allowed the application under section 482 Cr.P.C and set aside the impugned order dated 12.08.2021.
Case Title: Pawan Garg vs. State of U.P. and Another
Coram: Hon’ble Justice Umesh Chandra Sharma
Case no.: APPLICATION U/S 482 No. - 28748 of 2022
Advocate for the Petitioner: Shyam Shankar Mishra, Vijay Kumar Mishra
Advocate for the Respondent: GA
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