Supreme Court Precedents on Heirs Liability in Cheque Bounce Cases

Supreme Court Precedents on Heirs Liability in Cheque Bounce Cases

 

Heirs Cannot Inherit Criminal Liability; Remedies Lies Civil Case Against Estate

 

Only “Drawer” of The Cheque Could Be Prosecuted

 

By Vishwas Kumar

New Delhi: May 12, 2026:

The Calcutta High Court’s ruling aligns with long-standing Supreme Court precedents that criminal liability under Section 138 of the NI Act is strictly personal. The Supreme Court has consistently clarified that only the “drawer” of the cheque can be prosecuted, heirs cannot inherit criminal liability, and creditors must pursue civil remedies against estates.

 

For a deeper understanding of property inheritance, execution of Wills and the legal principles governing suspicious circumstances in testamentary disputes, readers should refer to the Supreme Court decision in Dhanpat Vs Sheo Ram (Deceased Through LRs) & Ors, where the Court discussed the evidentiary standards required to establish a valid Will and the burden placed on the propounder in succession litigation.

Supreme Court Precedents Compared with Calcutta HC Ruling

1. Rakesh Ranjan Shrivastava v. State of Jharkhand (2024)

• Key Point: Interim compensation under Section 143A NI Act is discretionary, not automatic.
• Relevance: Reinforces that liability attaches only to the drawer, not heirs or unrelated parties. Courts must carefully assess capacity before imposing financial burdens. sudhirrao.com

2. Ajitsinh Chehuji Rathod v. State of Gujarat (2024)

• Key Point: Only the drawer can be prosecuted under Section 138. An authorised signatory is not the drawer, and liability of company officers arises only under Section 141 if the company itself is arraigned.
• Relevance: Mirrors Calcutta HC’s stance that heirs cannot be prosecuted unless they themselves issued the cheque.

3. Sanjabij Tari v. Kishore S. Borcar (2025)

• Key Point: Once execution of a cheque is admitted, presumptions under Sections 118 and 139 NI Act arise. However, liability is strictly personal to the drawer.
• Relevance: Confirms that heirs cannot be dragged into criminal proceedings; creditors must rely on civil recovery against estates. indialaw.in

4. Ashok Singh v. State of Uttar Pradesh (2025)

• Key Point: Burden of proof lies on the accused to rebut presumptions once cheque dishonour is established.
• Relevance: Again, liability is personal—only the accused drawer must rebut, heirs are outside the scope of prosecution. Court Kutchehry

 

Comparison Table

 

 

(Recommended Legal Resources)

 

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FAQ: Supreme Court & Heirs’ Liability

Q1: Has the Supreme Court ever held heirs liable under Section 138?
No. The Court has consistently ruled that only the drawer can be prosecuted.

Q2: What if the deceased was a company director?
Liability may extend to directors only if they were in charge of the company at the time, but heirs of deceased directors are not automatically liable.

Q3: Can creditors still recover money after the drawer’s death?
Yes, through civil suits against the estate, but not via criminal prosecution.

Q4: Does the presumption under Sections 118/139 apply to heirs?
No. It applies only to the drawer who issued the cheque.

 

In essence, the Calcutta HC ruling is fully consistent with Supreme Court jurisprudence: criminal liability under Section 138 NI Act is personal, non-transferable, and extinguishes upon death. Creditors must pursue civil remedies against the estate, not heirs.