IMPORTANT POINT
Closing an account with the bank subsequently before the cheque issued reaches the bank for encashment amounts to an offence u/s. 138 of the negotiable Instruments Act.

K.T. Thomas, J. - A complaint was field in the lower court by petitioner's wife alleging that her husband has committed the offence under section 138 of the Negotiable Instruments Act. 1881 (for short the Act) in respect of a cheque bearing the date 28.8.1992. The cheque is for Rs. 1,50,000/- The magistrate before whom the complaint was field took cognizance of the offence and is accused process to the petitioner. Now the petitioner wants to have the complaint quashed under section 482 of the Code of Criminal procedure (for short the Code).

2. The complaint shows that a post -dated cheque was issued by the petitioner towards some liability or debt due to the complainant. Complainant alleges that petitioner had closed his account with the draw bank before the cheque was presented and hence it was returned unpaid for that reason. Petitioner's main contention is that there is no offence under section 138 of the Act when there was no account in the draw bank at the time the cheque was presented for encashment. According to the learned counsel, account of the drawer must be alive with the draw bank at the time of presentation of the cheque and only if the cheque is returned unpaid because of insufficiency of money - standing to the credit of the drawer or if it exceeds the limit arranged to be paid that an offence under section 138 of the Act can be founded.

3. For considering the aforesaid contention, I will take it for granted that the cheque in question was a post dated one and that the drawer closed the account before the cheque became due for encashment.

4. The relevant portion in the first para of section 138 reads thus:

"Where any cheque drawn by a person on an account maintained by him with a. Banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence"

Only in two contingencies can a drawer go to the magistrate court complaining of the commission of offence under section 138 of the Act with a bounced cheque provided he complied with the other formalities. One is that the cheque was returned unpaid because of insufficiency of the amount of money standing to the credit of the drawer in the account with the bank concerned. The second is that the cheque exceeds the amount arranged to be paid from that account. The latter is of no application in the case of closure of account. But it has to be considered whether the former contingency would rise when a cheque is dishonoured on the ground that "account is closed".

5. A cheque cannot be issued de hors an account maintained by its drawer with the banker. Section 6 of the Act says that a cheque is a bill of exchange drawn on a specified banker. No person can draw a cheque if he does not have an account with a banker. When the cheque is returned by the bank unpaid because of the amount of money standing to the credit of "that account" is insufficient to honour the cheque, it is open to the holder of the cheque to make demand for payment as indicated in clause (b) of the proviso. The words "that account" in the section denote to the account in respect of which the cheque was drawn. No doubt, if any person manages to issue a cheque without an account with the bank concerned its consequences would not snow ball into the offence described under section 138 of the Act. Such acts may amount to other offences. For the offence under section 138 of the Act there must have been an account maintained by the drawer at the time the cheque was drawn if the drawer of the cheque. Close the account subsequently (before the cheque reaches the bank) th