Issuing a cheque from a closed account is a valid ground for prosecution under Section 138 of NI Act.

JUDGMENT

(Prayer: Criminal Original Petition is filed under Section 482 of Cr.P.C., to call for the records in C.C.No.50 of 2019 on the file of the Judicial Magistrate Court (Fast Track), Mayiladuthurai and quash the same.)

1. This Criminal Original Petition is filed to quash the private complaint filed alleging dishonour of cheque value of Rs.45,00,000/- an offence punishable under Section 138 of NI Act.

2. The gist of the complaint:

The petitioner and his family members had borrowed money from the Respondent on various dates and to discharge the due, the petitioner agreed the overall due as Rs.45 lakhs and executed an undertaking letter dated 02/01/2019 and an even dated promissory note for the said sum. To discharge the said agreed loan, the subject cheque dated 07/01/2019 drawn at Bank of Baroda, Mayiladuthurai Branch was issued. The said cheque was presented for collection on 18/01/2019 as requested by the petitioner. However, the cheque returned with endorsement memo stating “the account closed” on 15/06/2013. Informing the petitioner about the dishonour of his cheque, the respondent gave a notice dated 18/02/2019 calling upon the petitioner to pay the cheque amount or to face the legal consequences. On receipt of the notice, the petitioner sent a reply notice dated 27/03/2019 through his Advocate.

3. The petitioner, in his reply has stated that, he and the respondent know each other for years and used to have money transactions. The respondent being a Development Officer in LIC, used to collect blank cheques from the petitioner to pay premium for the LIC Policy. At times, instead of making payment through those cheques, he used to pay the premium in cash and retain the blank cheques. Out of trust, the petitioner allowed the respondent to do so. One such cheque given long years ago been misused by the respondent. The Current Account from which the cheque drawn became inoperative 10 years back and the account itself was closed in the year 2013. Since the cheque was not issued to discharge any liability, he need not pay the cheque amount.

4. After the receipt of the reply notice, indicating the refusal to pay the cheque amount, the criminal complaint in C.C.No.50/2019 came to be filed for action under Section 138 of NI Act. The said complaint is challenged in this petition filed under Section 482 of Cr.P.C on the following grounds:-

a). The cheque drawn from the account maintained by Best Bangalore Iyengar Bakery and Sweets. The petitioner has signed the cheque as Proprietor of the said Firm. Whereas, the statutory notice as well as the complaint is filed against him as Proprietor of Mayuram Iyengar Bakery and Sweets. The complaint is against the Firm, which is not the account holder of the subject cheque.

b). Admittedly, the account was closed about 6 years prior to the date of the cheque. It is therefore obvious that the blank cheque given long back on trust been misused. The signature in the subject cheque is denied.

c). The respondent has not disclosed his wherewithal to lend a huge sum of Rs.45 lakhs. The documents like IT returns, Bank Statement of accounts not sufficient to prove the respondent's source of income or payment of loan to the petitioner or his family members.

5. The Learned Counsel appearing for the petitioner submitted that the Learned Magistrate ought not to have taken cognizance of offence since the complaint is not maintainable for the reasons stated above. The complaint filed with malicious intention to harass the petitioner, hence to be quashed.

6. Per contra, the Learned Counsel appearing for the respondent/complainant submitted that the petitioner, in his reply notice, admits the issuance of cheque but only denied the circumstances under which the cheque was issued. Whereas, in the quash petition, for the reason well known, he has come forward to deny the signature in the cheque. The intention of the petitioner to cheat the respondent is made obvious by issuing a cheque of “an closed accoun