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VENKATA JYOTHIRMAI PRATAPA
Ganta Kavitha Devi – Appellant
Versus
State of Andhra Pradesh – Respondent
What is the effect of a cheque drawn on a merged bank on liability under Section 138 NI Act? What is the High Court’s approach under Section 482 Cr.P.C. to quash proceedings when the cheque is invalid due to bank merger? What determines the validity of a cheque for purposes of Section 138 of the NI Act in the context of bank mergers?
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JUDGMENT / ORDER :
The instant petition under Section 482 of Code of Criminal Procedure, 1973 (for short 'Cr.P.C.'), has been filed by the petitioner/accused, seeking to quash the proceedings against her in CC No.911 of 2022 on the file of the Court of II Additional Metropolitan Magistrate, Vijayawada, for the offence punishable under Section 138 read with 142 of the Negotiable Instruments Act, 1881 (for short 'N.I. Act').
2. The facts which led to the filing of this petition, in brief, are as follows :
(b) On repeated demands of the complainant, the accused issued a Cheque Bearing No.032824, dated 20.09.2021 for Rs.42,00,000/- drawn on State Bank of Hyderabad, Mahabubabad Branch, Warangal District and on presentation for collection in ICICI Bank, Vijayawada, the said cheque was returned with an endorsement "Invalid Cheque (SBH)" under a return memo dated 22.09.2021.
(c) On 30.09.2021, the complainant got issued a legal notice to the
An invalid cheque, due to bank merger, does not attract liability under Section 138 of the Negotiable Instruments Act; courts can quash proceedings lacking legal enforceability.
The legal presumption under Section 139 of the NI Act favors the complainant, and factual disputes must be resolved at trial, not pre-trial.
A cheque drawn on a bank that has ceased to exist loses its identity as a negotiable instrument, rendering any related criminal proceedings invalid.
Cheques drawn on a non-existent bank are legally invalid and cannot attract liability under Section 138 of the Negotiable Instruments Act.
Cheques drawn on a non-existent bank are invalid, and dishonour of such cheques does not result in liability under Section 138 of the Negotiable Instruments Act.
Cheques drawn on a defunct bank do not attract liability under Section 138 of the Negotiable Instruments Act.
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