A complaint under Section 138 of the Negotiable Instruments Act is maintainable even if the cheque is dishonoured due to the account being frozen.

JUDGMENT :

1. The petitioner had filed a com plaint under section 138 of the Negotiable Instruments Act, 1881 (for short ‘the Act’) against the respondent, as the cheque claimed to have been issued by the respondent was dishonoured due to the reason ‘Account Frozen’.

2. The learned court of 3rd Additional Munsiff (JMIC), Srinagar (hereinafter to be referred as ‘the Trial Court’) vide order dated 23.08.2014 issued the process against the respondent for commission of offence under section 138 of the Act. The respondent filed an application before the learned Trial Court stating therein that as the cheque in question has been dishonoured due to the frozen account, the complaint under section 138 of the Act was not maintainable. The learned Trial Court after hearing the parties, dismissed the said application vide order dated 04.11.2017. The respondent being aggrieved of orders dated 23.08.2014 (order of issuance of process) and 04.11.2017 passed by the learned Trial Court, filed a revision petition thereby impugning both the orders mentioned above before the court of learned Principal Sessions Judge, Srinagar (hereinafter to be referred as ‘the Revisional Court’). The learned Revisional Court vide its order dated 09.05.2018 quashed both the abovementioned orders, resulting into dismissal of the complaint.

3. Aggrieved of order dated 09.05.2018 passed by the Revisional Court, the petitioner has sought the quashing of the same on the following grounds:

(i) That the learned Magistrate had rightly dismissed the application for dropping of the proceedings, as no provision for dropping of proceedings was available in the Code of Criminal Procedure.

(ii) That the Revisional Court has not considered this aspect of the matter that even the complaints for dishonour of cheques on account of ‘Closed Account’ or ‘Payment Stopped by the Drawer’ are maintainable and likewise a complaint can be filed, even in case of dishonour of cheque due to frozen account.

4. The objections to the petition have been filed by the respondent wherein it has been stated that the petitioner has concealed the material facts before this Court as on the presentation of the cheque by the petitioner, the account of the respondent was frozen by the Investigating Agencies and despite having the funds available in the account, the cheque issued was not honoured as the situation was beyond the control of the respondent. The stand of the respondent is that the situation was beyond his control as such, the respondent could not have been proceeded against for commission of offence under section 138 of the Act, as the cheque was dishonoured only because of the account was frozen pursuant to the order of the Crime Branch.

5. Learned counsel for the petitioner has vehemently argued that the learned Revisional Court was not right in returning a finding that the application for dropping of proceedings was wrongly decided by the learned Trial Court, as the learned trial court had no power to review its own order, once the cognizance had already been taken and process issued against the accused/respondent. He has further argued that the learned Revisional Court has wrongly returned a finding that it was not the case of the petitioner that besides the frozen account, there were insufficient funds in the account of the respondent to make him liable for prosecution under section 138 of the Act, as the said finding, if at all was to be returned, could have been returned only after the trial and not at the threshold when only the process was issued against the respondent. He has further argued that there was nothing on record to show as to when the account was frozen because the cheque was issued on 01.07.2014 and the same was dishonoured vide memo dated 14.07.2014.

6. Learned counsel for the respondent has submitted that the cheque was dishonoured not because of the insufficient funds but because the bank account of the respondent was frozen by the Crime Branch and it was not because of the fau