IMPORTANT POINT
Closing down of bank account does not mitigate offence under Section 138 , N.I. Act.

Mohammad Rafiq, J. —This criminal miscellaneous petition under Section 482 of Criminal Procedure Code has been filed by accused/petitioners, namely, Arun Maheshwari and M/s. Mineral Mining and Trading Company. Cognizance against accused/petitioners was taken by trial court way back on 11.12.2001 and charge against them was framed on 27.1.2003. In that criminal case, accused/petitioners filed an application on 10.8.2010 stating that order of cognizance was wrongly drawn against accused/petitioners as no case for offence under Section 138 of Negotiable Instruments Act, 1881 was made out because evidence show that cheque in question was presented for payment to the bank much after closure of the bank account. Learned trial court has rejected application by order dated 21.8.2010. Hence this criminal miscellaneous petition under Section 482 Cr.P.C. on behalf of accused-petitioners challenging aforesaid order and praying in effect that order of cognizance dated 11.12.2001 be quashed and all proceedings in complaint against petitioners be quashed and set-aside.

2. Shri S.R. Surana, learned counsel for petitioners, has argued that prerequisite condition for maintaining complaint against accused is that cheque must have been issued on an account being maintained by the accused. Section 138(a) of Negotiable Instruments Act, 1881 (for short, ‘the Act’) provides that an account must be maintained by accused 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 account by an agreement made with that bank. It is only then that such person shall be deemed to have committed an offence under Section 138 of the Act.

3. Learned counsel submitted that all other cheques that were issued to complainant in present case pertained to 1995 and same were presented for realization and were cleared. This cheque was also issued long ago on 8.6.1995. Although it was a blank cheque but it was meant to be used immediately by complainant. Taking advantage of fact that it was a blank cheque, the complainant put the date 6.4.2001 on said cheque and presented the same with bank for payment. Learned counsel submitted that concerning bank account was closed long ago on 12.9.1998 and the cheque has apparently been prepared two and a half year after the date of closure of bank account. Basic ingredient of Section 138 of the Act that account must be maintained by accused with a banker was not satisfied in present case. Offence of Section 138 of the Act is therefore, not made out. Learned counsel for petitioners, in support of his argument, cited judgment of Supreme Court in Jugesh Segal v. Shamsher Singh Gogi.1

4. Shri S.R. Surana, learned counsel for petitioner, further argued that another ingredient that was necessary to make out offence under Section 138 of the Act is that existing debt should be there which could be enforceable in law. It is contended that there was no evidence whatsoever to show that there was any existing debt or loan pursuant to transaction between parties as on date on which cheque was presented for payment to banker of accused/petitioners. Accused/petitioners ceased to have any transaction with complainant/respondent long ago which is evident from fact that all cheques that were issued to complainant/respondent were presented to banker in 1995 and were cleared. This solitary cheque could not therefore be used by complainant/respondent only with a view to filing a frivolous complaint against accused-petitioners under Section 138 of the Act. Learned counsel, in support of this argument, cited judgment of Bombay High Court in Sanjay Mishra v. Kanishka Kappor @ Nikki and Another2 and also various judgments relied on therein.

5. Lear