The Rajasthan High Court has refused to quash cheque bounce proceedings against a woman who allegedly issued a cheque as a guarantor for a loan taken by her husband. Justice Sunil Beniwal held that the fact that the loan was borrowed by the husband and the cheque was described as security did not, by themselves, justify terminating the criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881.
In its order dated October 27, 2026, the Court dismissed the woman’s petition, leaving her free to raise her legal defences before the trial court.
Background
The petitioner, approached the High Court challenging an order dated March 14, 2018, passed by the Special Metropolitan Magistrate, Negotiable Instruments Act Cases, No. 7, Jodhpur Metropolitan.
According to the petition, her husband borrowed ₹1 lakh on April 13, 2015, and another ₹1.10 lakh on August 8, 2015, from Royal Finance, carrying interest at 2.25% per month. The total loan amount was ₹2.10 lakh.
Her husband issued a cheque for the amount, while Kanwar also issued a cheque for the same sum as security. Both cheques were dishonoured due to insufficient funds, following which the lender initiated proceedings under Section 138 of the Act.
Her husband was convicted on December 2, 2019, and sentenced to six months of simple imprisonment along with a fine of ₹2.65 lakh. He subsequently served the sentence.
Kanwar argued that she had issued the cheque only as a guarantor and should not face criminal proceedings for a loan taken by her husband.
The High Court examined whether a cheque issued by a guarantor could attract Section 138 and whether the husband’s conviction and completed sentence justified quashing the proceedings against the petitioner.
Referring to the Supreme Court’s decision in ICDS Ltd. v. Beemna Shabeer, the Court observed that a guarantor’s cheque is not automatically excluded from the provision merely because the underlying loan was taken by another person.
The Court clarified,
“Accordingly, the petitioner’s status as a guarantor does not, by itself, furnish a ground for quashing the proceedings when the cheque is alleged to have been issued by her and bears her signature.”
It also considered the argument that the cheque had been issued only as security. The Court explained that the label attached to a cheque does not, on its own, determine whether Section 138 applies.
“The relevant consideration is whether the cheque represented a legally enforceable debt or other liability in the circumstances existing at the relevant time,” the Court observed.
The Bench further noted that the disputed questions concerning the transaction, the purpose of the cheque and the existence of an enforceable liability required examination of the evidence by the trial court. The husband’s imprisonment did not establish that the underlying debt had been repaid.
Finding insufficient grounds to exercise its inherent jurisdiction to quash the proceedings, the Rajasthan High Court dismissed the criminal miscellaneous petition.
The Court clarified that Kanwar remained free to raise all legally available grounds before the trial court, which must consider them on their own merits without being influenced by the High Court’s observations.
