A cheque drawn on a bank that has ceased to exist loses its identity as a negotiable instrument, rendering any related criminal proceedings invalid.

ORDER :

1. The Criminal Petition No.7756 of 2024 is filed to quash CC.No.73 of 2024 on the file of I Additional Chief Metropolitan Court at Vijayawada. The Criminal Petition No.7758 of 2024 is filed for quashing CC.No.353 of 2024 on the file of IV Additional Chief Metropolitan Magistrate at Vijayawada. The accused is common in both the cases.

2. The learned counsel appearing for the petitioner submits that the quash petitions are filed seeking quash of the Calendar Cases which were registered under Section 138 & 142 of Negotiable Instruments Act.

3. As per the complaint filed against the petitioner, the petitioner is said to have issued the cheques drawn on Vijaya Bank, Kunchanapalli Branch. Those cheques were presented for clearance on 08.08.2022 with the complainant’s banker.

4. The said cheques were returned dishonoured with an endorsement referred to drawer, old bank cheque MICR not present, excluded in system. The complainant thereafter got issued a statutory legal notice and filed complaints.

5. The learned counsel appearing for the petitioner submits that the 1^st respondent was in possession of old cheques of the erstwhile Vijaya Bank and the same were presented after the amalgamation of the Vijaya Bank and Dena Bank with Bank of Baroda. It is submitted that with effect from 11.03.2019 the amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda is considered as the recorded date. A Gazette Notification was also issued on 02.01.2019.

6. It is also submitted that with effect from 30.03.2019 all branches of Vijaya Bank and Dena Bank started functioning as branches of Bank of Baroda. In those circumstances the cheques of Vijaya Bank which were presented by the complainant cannot be considered as Negotiable Instruments.

7. The learned counsel appearing for the respondents submits that the petitioner has resorted to a fraudulent activity of handing over stale cheques by duly filling in the amounts which were rightly due payable to the complainant. It is also submitted that on the assurance of the petitioner, that the cheques would be cleared as and when presented after the due date mentioned on the cheque, the complainant had presented those cheques.

8. It is submitted by the learned counsel for the respondents that the petitioner is guilty of cheating and playing fraud with a mischievous motive.

9. The point for consideration before the Court is whether the grounds raised by the petitioner for quashing the proceedings in CC.No.73 of 2024 on the file of I Additional Chief Metropolitan Court at Vijayawada and for quashing CC.No.353 of 2024 on the file of IV Additional Chief Metropolitan Magistrate at Vijayawada. Section 6 of the Negotiable Instruments Act reads follows ;

[6. “Cheque”.—A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Explanation I.—For the purposes of this section, the expressions— 2 [(a) “a cheque in the electronic form” means a cheque drawn in electronic form by using any computer resource and signed in a secure system with digital signature (with or without biometrics signature) and asymmetric crypto system or with electronic signature, as the case may be;] (b) “a truncated cheque” means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing. Explanation II.— For the purposes of this section, the expression “clearing house” means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of India.] 3 [Explanation III.—For the purposes of this section, the expressions “asymmetric crypto system”, “computer resource”, “digital signature”, “electronic form” and “electronic si