IMPORTANT POINT
Where cheque was returned unpaid for reason that account was attached by Court order in a criminal case, prosecution under section 138 of NI Act would not lie against drawer of cheque.

Vipin Sanghi, J. (Oral) — This petition under Section 482 of the Cr.P.C. (for short ‘the Code’) has been preferred for quashing the proceedings initiated under Section 138 of the Negotiable Instruments Act titled Gyan Chand Jain v. Vijay Chaudhary, earlier pending in the Court of Ms. Navita Kumari Bagha and now pending in the court of Sudesh Kumar, M.M. Patiala House, New Delhi.

2. The case of the complainant/respondent in his aforesaid complaint is that on 8.8.2004 (which according to the counsel for the respondent should be read as 6.8.2004), the accused/petitioner visited the shop of the complainant and took some diamonds and, diamond studded jewellery worth Rs.1,52,35,000 on consignment/sale basis and in lieu thereof, the accused petitioner issued a cheque bearing. No. 061630 for a sum of Rs. 1,52,35,000 drawn on Federal Bank, Overseas Branch, New Delhi dated 10.4.2006. It is further alleged that the complainant presented the said cheque through its banker for collection and the same has been returned unpaid with the remarks ‘funds insufficient’ and ‘payment stopped by attachment order/Court order’.

3. The submission of the petitioner is that even according to the complainant, the said cheque was a post-dated one, which was presentable for encashment after nearly one year and eight months from the date of its alleged issue. He submits that in the meantime, the operation of the account on which the cheque was allegedly issued was stopped on account of an attachment order Court order in relation to FIR. No. 283/2005 under Sections 406/420/467/468/471/120B, IPC registered against the petitioner with P.S. Connaught Place. On account of the said attachment order, it was not possible for the petitioner to operate the said account either to deposit any amount in the account, or to withdraw any amount therefrom. For an offence to be made out under Section 138 of the Negotiable Instrument Act; the account must be maintained by the drawer with his banker for payment of the amount for which the cheque is drawn. He submits that on the date of the dishonour, it could not be said that the account was maintained by the petitioner and therefore, there was no question of the offence under Section 138 of the Negotiable Instruments Act having been committed by the petitioner.

4. There are various other allegations and cross-allegations between the parties with regard to the alleged-theft of the said cheque; its being filled up by the respondent; and also with regard to the dealings between the parties. However, I am not concerned with any of those issues in the present proceedings. I am only confronted with the issue whether, in a case where the payment has to be stopped because of attachment of the bank account on which the cheque is drawn by an order of the Court, in respect of a postdated cheque, which attachment has taken place between the date of issuance of the cheque and the date when the payment under the cheque became due, the offence under Section 138 of the Negotiable Instruments Act can be said to have been committed, if the cheque is dishonoured for the reason “payment stopped by attachment order Court order”, apart from the reason of the funds being insufficient.

5. Learned counsel for the petitioner has placed reliance on the following decisions in support of his submissions:

1. Ramesh Kumar v. State of Kerala.1

2. Standard Chartered Bank & Anr. v. State & Anr.2

3. Nagaraja Upadhya v. M. Sanjeevan.3

6. On the other hand, the submission of the learned counsel for the respondent is that while interpreting the provision of Section 138 of the Negotiable Instruments Act, the Court has to keep in view the mischief that the said provision intends to remedy. He submits that the Courts have, from time-to-time, interpreted Section 138 so as to meaningfully apply the same to cases where the drawer of the cheque resorts to ways and means to avoid payment of the cheque by creating grounds other than those mentioned in Section 13