2005 Supreme(Bom) 1373

IN THE HIGH COURT OF BOMBAY
Abdul Rehman M. Mulgand
Versus
Mohammad Hashan Mulgand
Decided On : (October 5, 2005) 2006

Headnote:Negotiable Instruments Act, 1881 - Section 138 - Criminal Procedure Code, 1973, Section 482 - Cheque bounced - Process issued - Challenged - Order set aside - Challenged - Contention of complainant cheque once dishonoured liable to pay - Contra - Cheque number, account number, signature disputed - Cheque bounced because a/c No. not given - Proprietary not marked - Section 138, N.I. Act, a penal provision, should be analysed properly - Order impugned upheld. - Generally it is the Bank, while issuing a cheque book to an account holder that it wires the account number of the holder of the account which surprisingly the cheque in question did not have, and one of the reasons for return of the cheque is that it did not have the said account number. The other reason, as explained is that it did not have the "proprietary stamp". Inspite of that the complainant instead of returning the cheque to the accused for correction of the said formal defects, chose to present the same for payment. As seen from Section 138 of the Act, there are two situations which the section contemplates namely, the return of the cheque (a) either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or (b) that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank. It is now well settled that when a cheque is returned either with remarks that the ’account is closed’ or ’funds insufficient’ or ’refer to drawer’ or ’instruction for stoppage of payment’ or ’exceeds arrangement’ these would be covered by the expression "the amount of money standing to the credit of that account is insufficient to honour the cheque’ as envisaged in Section 138. In the case at hand, the cheque in question was not returned for either of the said two reasons. Section 138 of the Act is a penal provision and should be strictly interpreted and no wider meaning can be given to the aforesaid expressions than what is used in the section.

       Negotiable Instruments Act, 1881 - Section 138 - Cheque dishonoured - Account closed - Long back - Endorsement in list of dishonour saving cheque dishonoured because account number absent - Difficult to conclude cheque issued by accused - Process quashed - Order impugned justified. - The accused has disputed not only his signature on the cheque but even the very issuance thereof or for that matter that there was any liability towards settlement of dues of hire charges. The statement made on behalf of the accused in reply cannot be read as if to say that it is in admission that the accused had an account in UCO Bank, prior to 8-10 years. This was a case where the cheque was returned dishonoured mainly because the account could not be located for want of account number or in other words because it had apparent basic structural defect and not because the account was closed or there was insufficient funds in the account. Such an endorsement will not amount to saying that the account was closed. It is rather surprising that the said cheque allegedly issued by the accused did not have the account number of the account of the accused held by him in UCO Bank, Hubli. In the absence of the account number and the stand taken by the accused in the reply it would be difficult even to come to a prima facie conclusion that the cheque was issued by the accused. In the light of that, the order of the Sessions Judge could not be faulted.

       Negotiable Instruments Act, 1881 - Section 138 - Complaint - Dishonour of cheque - Account number and proprietary stamp missing in cheque issued - Cheque cannot be returned merely on ground that account closed or insufficient fund in account - Cheque returned only because account could not be located for want of account number - Case not covered by Section 138. - This was a case where the cheque was returned dishonoured mainly because the account could not be located for want of account number or in other words because it had apparent basic structural defect and not because the account was closed or there was insufficient funds in the account. In my view, such an endorsement will not amount to saying that the account was closed. It is rather surprising that the said cheque allegedly issued by the accused did not have the account number of the account of the accused held by him in UCO Bank, Hubli. In the absence of the account number and the stand taken by the accused in the reply it would be difficult even to come to a prima facie conclusion that the cheque was issued by the accused. In the light of that, the order of the learned Sessions Judge could not be faulted.

       Negotiable Instruments Act, 1881 - Section 138 - Complaint - Dishonour of cheque - Notice for - Contained necessary and material particulars about Bank’s name and amount of cheque - Number and date of cheque as mentioned in notice and complaint mixed up - Complaint cannot be dismissed only on such ground. - It was not necessary for the drawer to mention the number of the cheque, for the drawer to comply with the demand made in the notice since the drawer has 15 days to comply with the demand made etc. The Court held that only because there was a variation in the number of the cheque mentioned in the notice and in the body of the complaint and the cheque that was filed into Court was of no consequence when in the notice of demand the amount covered by the dishonoured cheque was correctly mentioned. In the case at hand, the complainant’s notice had the necessary and material particulars regarding the bank’s name and the amount of the cheque in case the accused wanted at all to comply with the same and therefore in courts view, the complaint could not have been dismissed for mixing up the number and the date of the cheque as mentioned in the notice and the complaint.