Cheque Bounce Liability Dies with Drawer: Calcutta HC Clears Heir
Court affirms NI Act liability is personal, not transferable
Legal heirs shielded from criminal prosecution in cheque dishonour cases
By Our Legal Correspondent
New Delhi: May 12, 2026:
The Calcutta High Court has ruled that criminal liability under Section 138 of the Negotiable Instruments Act (NI Act) is strictly personal and cannot be inherited. This landmark decision quashed proceedings against a man whose deceased brother had issued a dishonoured cheque, clarifying that heirs or associates cannot be prosecuted for cheque bounce cases.
For readers studying proof of Wills, suspicious circumstances, attesting witnesses and testamentary succession under the Indian Succession Act, the Supreme Court ruling in Shivakumar & Ors Vs Sharanabasappa & Ors is an important reference, as it explains how courts examine the genuineness of a Will, evidence of attestation and unexplained suspicious circumstances in property inheritance disputes.
Background
The Calcutta High Court, in [XYZ vs State of West Bengal], addressed whether criminal liability under Section 138 of the NI Act can extend to the relatives of a deceased drawer. The petitioner faced prosecution because his late brother had issued a cheque that was dishonoured. Justice Uday Kumar categorically quashed the proceedings, holding that liability under Section 138 is personal and extinguishes upon the death of the drawer.
Section 138 of the NI Act
Section 138 criminalises the dishonour of cheques for insufficiency of funds. The essential ingredients include:
- Issuance of cheque by the drawer
- Dishonour due to insufficient funds
- Failure to pay within 15 days of notice
The offence is punishable with imprisonment up to two years or fine up to twice the cheque amount. Importantly, it is a criminal liability, distinct from civil recovery.
Court’s Reasoning
The High Court emphasised:
- Criminal liability is personal: Unlike civil debts, criminal responsibility cannot be transferred to heirs.
- Doctrine of actus non facit reum nisi mens sit rea: A wrongful act requires guilty intent. Since heirs did not issue the cheque, they cannot be presumed guilty.
- Section 306 CrPC analogy: Criminal proceedings abate upon the death of the accused.
Thus, heirs may inherit civil liabilities (like repayment obligations), but not criminal liability under Section 138.
Wider Legal Implications
- Protection of Heirs: Families of deceased persons are shielded from harassment in cheque bounce prosecutions.
- Civil vs Criminal Divide: While creditors may pursue civil remedies against estates, criminal prosecution ends with the drawer’s death.
- Judicial Consistency: The ruling aligns with precedents from other High Courts and the Supreme Court, reinforcing that criminal liability is non-transferable.
Comparative Perspective
- Civil Liability: Survives death; heirs may be sued for recovery from estate.
- Criminal Liability: Dies with the accused; heirs cannot be prosecuted.
This distinction ensures fairness and prevents misuse of criminal law against uninvolved parties.
Conclusion
The Calcutta High Court’s decision is a reaffirmation of fundamental criminal law principles. It clarifies that Section 138 NI Act prosecutions cannot extend beyond the drawer, thereby balancing creditor rights with protection of heirs. Creditors must resort to civil remedies for recovery, while criminal liability remains strictly personal.
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Specific Draft of Last Will and Testament executed by a Husband in favour of his Wife to the exclusion of all other legal heirs.
LAST WILL AND TESTAMENT
This Last Will and Testament is made and executed on this ___ day of , 20, at ________, by me namely Mr. [Full Name], aged approximately ___ years, (holder of Aadhaar No./PAN No.___/Passport No. ____________, issued on ____________ at ____________), son/wife of Mr. [Father/Husband's Full Name], presently residing at [Full Residential Address] (hereinafter referred to as the “Testator”), which expression shall, unless repugnant to the context, mean and include my legal representatives.
1. That since life is inherently uncertain, I, the Testator, consider it prudent and necessary to execute this Last Will and Testament of mine (hereinafter referred to as the “Will”).
2. I hereby revoke, cancel, and annul all my previous Wills, codicils, and any other testamentary dispositions executed by me, if any, in respect of any properties mentioned therein. I further declare that this Will shall be my sole, valid, and binding Last Will and Testament.
3. I am lawfully wedded to Mrs. [Wife’s Full Name], aged about ___ years, (holder of Aadhaar No.___/PAN No./Passport No. ____________, issued on ____________ at ____________), and residing at [Full Address].
4. I am the absolute and exclusive owner of the following self-acquired movable and immovable assets (hereinafter collectively referred to as the “Said Properties”), more particularly described in Annexure-A appended hereto:
(i) *Movable Assets:
— Equity Share(s)/Security(ies)/Mutual Fund(s)
— Bank Account(s)
— Fixed Deposit(s)
— Other movable assets such as Vehicle(s), Jewellery, Artwork(s), Painting(s), Royalty(ies), and others
(*Delete whichever is not applicable)
(ii) *Immovable Assets:
— Residential House
— Residential Plot(s)
— Office/Commercial Space(s)
— Shop(s)
— Apartments
— Industrial/Commercial Property(ies)
— Agricultural Land(s)
(*Delete whichever is not applicable)
5. I declare and Will as under:
(i). That considering the uncertainties of human life and in full exercise of my testamentary capacity, I declare that upon my demise, the Said Properties shall devolve upon and be inherited absolutely, exclusively, and unconditionally by my wife to the exclusion of all my other legal heirs and/or claimants.
(ii). That in the unfortunate event that my wife named above predeceases me, I direct that the Said Properties shall devolve upon and be inherited equally and in equal shares by her legal heirs alone, to the exclusion of all my other legal heirs and/or claimants.
6. I further declare that any properties, whether movable or immovable, acquired by me and/or to which I become entitled after the execution of this Will, and which exist at the time of my death, shall also devolve exclusively and absolutely upon my wife, Mrs. [Wife’s Full Name], to the exclusion of all my other legal heirs and/or claimants. Should she predecease me, then such after-acquired properties shall devolve equally and in equal shares upon her legal heirs only.
7(i). I hereby nominate and appoint Mr./Ms./Mrs. [Full Name], S/o, D/o, W/o Mr. [Name], (holder of Aadhaar No._/PAN No./Passport No. _______, issued on ____________ at ________), resident of ________________, OR Mr./Ms./Mrs. [Full Name], S/o, D/o, W/o Mr. [Name], (holder of Aadhaar No./PAN No./Passport No. ____________, issued on ____________ at ____________), resident of ____________________, as the Executor/Executrix of this Will.
(ii). I further declare that the Executor/Executrix shall be fully authorized to administer and manage the Said Properties and to obtain probate if necessary, without furnishing any security. The Executor/Executrix shall also have the authority to appoint a substitute Executor/Executrix if circumstances so require.
8. I finally declare and affirm as under:
(i). That this Will constitutes my final and binding testamentary instrument and governs all my movable and immovable properties.
(ii). That I am executing this Will voluntarily and of my own free will, without coercion, force, fraud, undue influence, or inducement from any person or entity.
(iii). That I am of sound mind, memory, and in a fit mental and physical condition.
(iv). That I am capable of understanding the implications and legal effects of this Will.
(v). That the contents of this Will have been read over and explained to me in a language I understand, and I fully understand, accept, and approve the same.
(vi). That I have affixed my signature/thumb impression on this Will in full awareness and comprehension.
9. IN WITNESS WHEREOF, I, the Testator, have set my hand and subscribed to this Last Will and Testament at _____________ on this ___ day of _________, 20, in the presence of the undersigned witnesses who have attested this Will in my presence and in the presence of each other.
|
Affix Photograph of Testator |
XXX
(Signature/Thumb Impression separately at XXX and also separately partly across the photograph and partly on paper)
Testator: _________________________
10. We, the undersigned, hereby affirm that the Testator executed this Will in our joint presence, appeared to be of sound mind and full comprehension, and signed this Will willingly and without any duress. We, in turn, sign this Will in the presence of the Testator and in the presence of each other.
1. Name: _________________________
S/W/D/o: __________________________
Aadhaar No ___________
PAN No. ___________
Passport No: __________ (Issued on _______ at ______)
Address: ___________________________
Signature: _______________________
2. Name: _________________________
S/W/D/o: __________________________
Aadhaar No ___________
PAN No. ___________
Passport No: __________ (Issued on _______ at ______)
Address: ___________________________
Signature: _______________________
Annexure-A
Detailed schedule of all Movable and Immovable Properties
A: Movable Properties
1. Equity Share(s)/Security(ies)/Mutual Fund(s):
(a)
(b)
(c)
(d)
2. Bank Account(s):
(a)
(b)
(c)
(d)
3. Fixed Deposit(s):
(a)
(b)
(c)
(d)
4. Other Movable Assets:
(a) Vehicle(s)
(b) Jewellery
(c) Artwork(s)
(d) Painting(s)
(e) Royalty(ies)
(f) Others
(*Delete whichever is not applicable)
B: Immovable Properties
1. Residential House(s)
(a)
(b)
(c)
(d)
2. Residential Plot(s)
(a)
(b)
(c)
(d)
3. Apartment(s)
(a)
(b)
(c)
(d)
4. Office/Commercial Space(s)
(a)
(b)
(c)
(d)
5. Shop(s)
(a)
(b)
(c)
(d)
6. Industrial/Commercial Property(ies)
(a)
(b)
(c)
(d)
7. Agricultural Land(s)
(a)
(b)
(c)
(d)
(*Delete whichever is not applicable)
FAQ: Key Legal Points
Q1: What is Section 138 of the NI Act?
It criminalises cheque dishonour due to insufficient funds, making the drawer liable for prosecution.
Q2: Can heirs be prosecuted if the drawer dies?
No. Criminal liability under Section 138 is personal and extinguishes upon the drawer’s death.
Q3: What happens to the debt if the drawer dies?
The debt survives as a civil liability. Creditors can claim against the estate of the deceased but cannot initiate criminal proceedings.
Q4: Why is criminal liability non-transferable?
Because criminal law requires personal culpability (mens rea). Heirs did not commit the act, so they cannot be punished.
Q5: Can a company’s directors be prosecuted under Section 138?
Yes, if they were in charge of and responsible for the conduct of business at the time of cheque issuance. But liability does not extend to unrelated heirs.
Q6: Does this ruling affect ongoing cases against heirs?
Yes. It sets a precedent that heirs cannot be prosecuted under Section 138, and such cases should be quashed.
Q7: What remedy remains for creditors?
Civil suits for recovery against the estate of the deceased drawer.
This ruling strengthens the principle that criminal liability is personal and non-transferable, ensuring heirs are not unfairly dragged into cheque bounce prosecutions while preserving creditors’ civil remedies.