The main legal point established in the judgment is the interpretation of the account maintenance requirement under Section 138 of the Negotiable Instruments Act and its application to determine the criminal liability of a person for dishonoring a cheque drawn on a closed account.

1. Jaspal Singh Bedi, the complainant in a case under S.138 of the negotiable Instruments Act (hereinafter referred to as "the Act"), has filed this appeal against the acquittal of Amarjit Singh by learned Additional Sessions Judge, Patiala, on May 24, 1994.

2. According to the appellant, Amarjit singh had borrowed Rs.50,000.00 from him. Amarjit Singh handed him a cheque dated july 21, 1992 drawn on Punjab and Sind bank to repay the amount but the cheque was returned with the remarks that the account had been closed. Thereupon legal notice dated July 24, 1992 was sent by jaspal Singh Bedis counsel to Amarjit singh, but no re-payment was made. Respondent approached the appellant with the intervention of some respectable persons and assured the appellant that payment would be made in due course with interest. The respondent again drew a cheque on august 2, 1992 on Indian Bank for rs.50,000.00 . When this cheque was presented, it was again returned with the remarks that there were insufficient funds in the account. Notice of dishonour of the cheque was issued on August 27, 1992, but respondent did not clear the dues. Jaspal singh Bedi filed a complaint under Section 138 of the Act. Amarjit Singh was summoned to stand trial. Vide judgment dated February 9, 1994, learned Judicial Magistrate, patiala found Amarjit Singh guilty of offence under Sec.138 of the Act and sentenced him to undergo imprisonment for a period of six months and to pay fine of Rs.55,000.00 . In default of payment of fine, the accused was to undergo further imprisonment for a period of one month. Out of fine amount, rs.50,000.00 was paid as compensation.

3. The accused filed an appeal. It was taken up by learned Sessions Judge, Patiala. Learned appellate Court was of the view that a person could be held liable under Section 138 of the Act only if the cheque that was dishonoured had been issued on an account maintained by him. However, if the account had been closed before the cheque was issued, it could not be said that the cheque had been drawn on an account maintained by the accused. Consequently, the Court held that if a person had already closed the account and then issued a cheque, it could not be said that the cheque had been drawn on an account maintained by him, therefore, offence under Sec.138 of the Act could not be said to have been committed. Reliance had been placed by the appellate court on the case titled S. Prasanna V/s. Vijay lakshmi, 1992 (2) Recent Criminal Reports 199 : (1992 Cri LJ 1233) (Madras ).

4. The sole question to be considered in this case would be whether drawing of a cheque on an account that had been closed would absolve the accused of criminal liability. Before proceeding to determine the exact legal position, it would be appropriate to consider the facts of the case.

5. The appellant had pleaded in the complaint that the respondent had borrowed Rs.50,000.00 from him and as repayment of the liability, respondent had issued cheque dated July 21, 1992 on Punjab and Sind bank, Patialia. This cheque was dishonoured by the Bank on the ground that the account had been closed. Legal notice was issued to the respondent on July 24, 1992. Therefore, the respondent, with the intervention of the relatives, assured that he shall repay the amount and again handed over a cheque dated August 2, 1992 drawn on Indian Bank for Rs.50,000.00 . This cheque was also dishonoured on the ground that there were insufficient funds in the account. The appellant appeared as PW-3 and restated his case as given in the complaint and testified that first cheque had been dishonoured on the ground that the account had been closed and the second cheque was dishonoured due to insufficiency of funds.

6. Pardeep Kumar - PW-1, of Indian Bank testified in respect of second cheque and stated that the cheque was presented for clearance on August 25, 1992 but the account had already been closed on November 21, 1987.

7. Jaswinder Mohan Singh PW-2 of punjab and Sind