Skip to main content

Blog # 4. Husband Not liable for Cheque issed by wife in personal capacity

The Hon'ble 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.



In the instant matter, Justice JB Pardiwala examined the question whether the petitioner can be made vicariously liable under Section 138 for the cheque dishonoured 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. this court held that 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 normal rule in the cases involving criminal liability is against vicarious liability. To put it clear, no one is to be held criminally liable for an act of another.



In the above judgment, the Supreme Court held that in case of 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 dishonour of cheque under Section 138 of the Negotiable Instruments Act....

Link to the Judgement

Comments

Popular posts from this blog

Blog # 26. Concept of Real Income under the Income Tax Act, 1961

  What is Income ? Before understanding the concept of Real Income, it shall be important to go through the the term “Income” and “Real”. Income is defined under S.2(24) of the Income Tax Act, 1961(Hereinafter referred as “the Act”). The definition as provided under the Act is an inclusive definition so as to cover up all the usual as well as unusual items, however it certainly does not define it in a way that we can be said it to be precise. The same can be understood by various Judge Made Laws. The first and the lead amongst them is a Privy Council Judgment in the case of Kamakshya Narain   Singh CIT 11 ITR 513 (PC)         Facts The assesse was a “Raja” gave mining lease and He received payments by way of royalty for coal mines leased out to various lessees. The case of the Assessee was that this royalty income received by the Assessee was nothing but the recoupment of the resources which shall be exhausted by the end of the lease and thus the same was not income bu

Reference to TPO- Law & Important Judgements

Sec 92CA provides that the Assessing Officer (“AO”) may make reference to Transfer Pricing officer (“TPO”) for computation of arm's length price (ALP) of international transaction entered into by assessee if the AO considers necessary and expedient to do so with prior approval of Principal Commissioner or Commissioner. Further, CBDT instruction No. 3/ 2003 made it mandatory for AO to make such reference if the value of international transactions exceeded Rs. 5 crores. Transfer pricing arena has seen many disputes revolving around making reference to TPO and powers/duties of AO and TPO around that. In a recent landmark decision in the case of Tata Consultancy Services Ltd., the Mumbai ITAT held that AO cannot make a reference to the TPO mechanically without applying his mind to the TP report or to any other material or information, despite CBDT Instruction No. 3/2003.The CBDT has recently revised CBDT Instruction No. 3/2003, by issuing  Instruction No. 15/2015 ,  which stated tha

Discussion on purchases held Bogus

Introduction Bombay High Court in Mahalaxmi Cotton Ginning Pressing and Oil Industries v The State of Maharashtra & Others (2012) 51 VST 1 (Bom.) (HC) (SLP dismissed by the Supreme Court) dealing with set off under section 48(5) and 51(7) of the Maharashtra Value Added Tax Act, 2002. Issue before the court was when dealer collects the taxes and does not deposit it in the Government Treasury, can the purchased be entitled to set off of the said taxes. Validity of the provision was challenged. Upholding the validity of the provision the court held that .Section 48(5) uses the expression “actually paid” in to the Government treasury. The words “actually paid” must receive their ordinary and natural meaning. There is no reason for the court to depart from the plain and ordinary meaning of these words when used in the context of section 48(5). To accept the contention that “actually paid…in the Government Treasury” should be read to mean the tax that ought t