Who can be made Accused
1 A Person, who is not the drawer of the subject cheque, cannot be prosecuted u/s 138, although the cheque may have been issued by another, in discharge of that person’s liability.
2 The Joint Account holder who has not signed the subject cheque, cannot be prosecuted u/s 138.
3 When the cheque is issued by a Company, through its director, the subject company must be joined as an Accused, whilst impleading said director as an Accused.
4 In Complaints against Trust, the Trust must be made accused alongwith the persons who are in charge of the Trust.
5 In Complaints against Companies or Partnership firms, the factors which may be weighed before joining any person as an Accused person, invoking vicarious liability.
6 Independent / Non Executive Directors, who ordinarily are not involved in day to day affairs of the company, cannot be joined as an Accused.
7 A Person cannot be made vicariously liable under section 138 prosecution merely because he was a guarantor for the subject debt, for which the subject cheque was issued.
8 Additional Accused cannot be impleaded once limitation period expires for filing the complaint, nor section 319 can be invoked.
9 In Complaint against companies / partnership firms, a person cannot be joined as an Accused merely because he was managing the business.
10 In Complaint against companies, only such person can be joined as an Accused who were in “Incharge” at the time of commission of offence u/s 138.
11 A chairperson of a large corporation cannot be made vicariously liable under section 138 prosecution.
12 In prosecution against proprietary concern, the Proprietor need only to be made accused and not proprietary concern.
13 The signatory to the cheque, who is not the proprietor, cannot be made Accused in a prosecution where cheque is issued by a proprietary concern.
14 In Complaints against companies, the Director who has signed the cheque, is liable to be made accused, although he may have resigned from the Company, after issuance of the cheque.
15 Where Director of Accused company has resigned before issuance of subject cheque, said Director cannot be held vicariously liable.
16 Where Director of Accused company were declared disqualified even before issuance of subject cheque, said Director cannot be held vicariously liable.
17 Where the cheque is issued by a person A in discharge of debts of another person, only said person A would be liable to be prosecuted u/s 138, and not that another person.