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2024 Supreme(Del) 18
IN THE HIGH COURT OF DELHI AT NEW DELHI
Saurabh Banerjee, J.
Mr. Sachin Jain & Ors. - Appellants
Versus
Mr. Rajesh Jain - Respondent
Cr.L.P. 91 of 2022
Decided On : 05-01-2024
Mr. Manu Bansal and Mr. Rohit Nain, Advocates, for the Petitioners.
Ms. Aashi Jain, Advocate, for the Respondent.
IMPORTANT POINT
The main legal point established is that if the account from which the cheque is drawn is blocked for reasons beyond the control of the drawer, the offence under Section 138 of the NI Act is not made out.
Headnote:
NI Act - Cheque Dishonour - Section 138/142 - Code of Criminal Procedure, 1973 - [Section 378(4)]
Fact of the Case:
The petitioner seeks leave to appeal against the judgment passed by the Metropolitan Magistrate in a case filed under Section 138/142 of the Negotiable Instruments Act, 1881 (NI Act) for dishonour of cheques. The cheques were returned due to insufficient funds and account blockage, leading to the complaint against the respondent.
Finding of the Court:
The court found that while the ingredients of the offence under Section 138 of the NI Act were fulfilled, the complaint was not maintainable as the petitioner failed to prove that the cheques were drawn on an account maintained by the respondent. The respondent was acquitted of the offence.
Issues: The primary issue was whether the account on which the cheques were drawn could be considered maintained when it was blocked/frozen/attached on the orders of an authority.
Ratio Decidendi: The court held that if the account from which the cheque is drawn is blocked for reasons beyond the control of the drawer, the offence under Section 138 of the NI Act is not made out. The court also emphasized that the blocking/freezing/attaching of the bank account cannot be considered a voluntary act of the drawer.
Final Decision: The court dismissed the leave petition, finding no error in the impugned judgment and stating that the complaint filed by the petitioner was not maintainable.
Key Points: - The complaint under Section 138/142 was not maintainable because the cheques were not shown to be drawn on an account maintained by the respondent at the time of presentation. (!) - If the account from which the cheque is drawn is blocked for reasons beyond the control of the drawer, the offence under Section 138 NI Act is not made out; blocking cannot be considered a voluntary act of the drawer. (!) (!) - The Court cites that accounts blocked/frozen/attached by authorities are not circumstances within the drawer’s control, leading to lack of proof of the first ingredient of Section 138 NI Act. (!) (!) - The leave petition was dismissed, upholding the impugned judgment that the complaint was not maintainable. (!) (!) - The facts include specific cheques dishonoured for insufficient funds and later due to account blockage, with notice given and complaint filed accordingly. (!) (!) - The court recognizes that the account blockage was at the instance of authorities and not a voluntary act of the drawer. (!) (!)
How to determine maintainability of a Section 138 NI Act complaint when the account from which cheques are drawn is blocked?
What is the effect of an account being blocked/frozen/attached on the liability under Section 138 NI Act?
What are the circumstances under which the blocking of an account is considered beyond the control of the drawer and thus not constituting the offence under Section 138 NI Act?
JUDGMENT
1. The petitioner, vide the present leave petition under Section 378(4) of the Code of Criminal Procedure, 1973, seeks leave to appeal against the judgment dated 02.09.2021 passed by the learned Metropolitan Magistrate, NI Act-04, Central District, Tis Hazari Courts, Delhi [learned MM] in CC No.516578/2016 titled "Sukhmal Chand Jain vs. Rajesh Jain" filed under Section 138/142 of the Negotiable Instruments Act, 1881 [NI Act] and seeks to punish the respondent in accordance with provisions of the NI Act.
2. As per complaint, the respondent/accused [hereinafter referred to as `Respondent'] had issued cheques bearing number(s) 001868, 001781 and 001791 dated 04.09.2014, 04.09.2014 and 08.09.2014 respectively, each for an amount of Rs.5,00,000/- (Rupees Five Lakhs Only) to the petitioner/complainant [hereinafter referred to as `Petitioner'] therein, in discharge of his legal liability. Upon presentation, the said three impugned cheques were returned twice. Firstly, vide return memo dated 18.09.2014 with remarks "Funds Insufficient" and secondly, vide return memo dated 01.12.2014 with remarks "Account Blocked", and the same was conveyed to the complainant on 04.12.2014.
3. In pursuance thereof, a Legal Notice dated 26.12.2014 was sent to the respondent by the counsel for the petitioner. Receiving no response thereto, a complaint was made by the petitioner before the learned MM.
4. In the impugned judgment, while the learned MM found all the other ingredients to constitute an offence under Section 138 of the NI Act fulfilled, however, the complaint against the respondent was not found maintainable as the petitioner failed to prove that the cheques were drawn on an account maintained by the respondent on the date of presentation of the three impugned cheques, and the respondent was acquitted of the offence under Section 138 of the NI Act.
5. Hence, the present petition before this Court, wherein learned counsel for the petitioner submits that the learned MM erred in ignoring the settled position of law set out by the Hon?ble Supreme Court as well as the Hon?ble High Court(s), who have rejected the strict interpretation of Section 138 of the NI Act, while accommodating the situations arising out of the deliberate acts/omissions of the accused person such as `account closed', `stopped payment' and `signature mismatched' etc. as such instances have been treated as species of the ingredient of the offence under Section 138 of the NI Act i.e., `amount of money standing to the credit of account is insufficient'. Reliance in this regard is placed upon Laxmi Dyechem vs. State of Gujarat, (2012) 13 SCC 375.
6. Learned counsel for the petitioner then placing reliance upon Pankaj Mehra & Anr. vs. State of Mahrashtra & Ors., (2000) 2 SCC 756 submits that jurisprudence of Section 138 of the NI Act provides the drawer two opportunities, firstly, presentation of cheque and secondly, a 15 day statutory period after receipt of Legal Notice to make the payment thereof. Therefore, non-payment towards the cheque during this 15 day period manifests the malafide of the accused person.
7. Lastly, relying upon the order dated 31.10.2013 of a Coordinate Bench of the High Court of Karnataka in Crl. P. No. 3879/2013 titled Mrs. Avneet Bedi vs. Mr. Navin Malik, learned counsel for the petitioner further submits that even if the account is deemed to be `not maintained' by the accused as the same was blocked, the accused will have the onus to establish his bona fide qua the availability of sufficient funds in such account to honour the cheque issued.
8. Learned counsel for the respondent on the other hand submits that the present petition is not maintainable as the judgment of the learned MM is found upon well settled law qua the issue of `account maintained' by the drawer. Relying upon Modi Cements Limited vs. Kuchil Kumar Nandi, (1998) 3 SCC 249 and Kusum Ingots & Alloys Ltd. & Ors. vs. Pennar Peterson Securities Ltd. & Ors., (2000) 2 SCC 745, learned counsel
