Dishonor of a cheque due to account blockage does not fulfill the criteria for an offense under Section 138 of the Negotiable Instruments Act, as the account was not maintained by the drawer.

CAV ORDER

M. NAGAPRASANNA, J.

The petitioners are before this Court calling in question proceedings in C.C.No.1446 of 2025 pending before the XIII Additional Chief Judicial Magistrate, Bengaluru arising out of PCR 11453 of 2024 filed by the complainant alleging offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short).

2. Facts adumbrated are as follows: -

2.1. The petitioners are accused 1 to 6 and respondent is the complainant. The 1^st petitioner is a Private Limited Company incorporated under the provisions of the Companies Act, 1956. The 2^nd petitioner is the Managing Director of the 1^st petitioner/Company and others are Directors of the Company. The complainant and his wife purchase flat bearing No.G-02, Block E in the 1^st petitioner/Company’s project named ND Passion Elite. It is the averment in the complaint that the complainant had availed a No Pre-EMI Scheme, wherein the Company was obligated to remit payment of interest on home loan until possession was handed over. There was a breach in contractual obligation between the two and the complainant avers that he was compelled to make payment of 41,75,634/- on account of non-handing over of possession. Towards the said amount, the Company issues a cheque bearing No.149728 amounting to Rs.41,00,000/-. The cheque was yet to be presented.

2.2. A Police notice comes to be issued to the Branch Manager, Bank of Maharashtra under Sections 91 and 102 of the Cr.P.C., which directs debit freezing of the accounts of the 1^st petitioner/Company and the 2^nd petitioner/Managing Director in furtherance of the investigation in Crime No.92 of 2022 registered for offences punishable under Sections 420 and 506 read with 34 of the IPC and another crime in Crime No.116 of 2023 registered for offences punishable under Sections 406 and 420 of the . This is an admitted fact. The debit freeze of the accounts of the 1^st petitioner/Company and the 2^nd petitioner/Managing Director happens on 24-05-2024. The complainant, to whom the cheque on 09-03-2024 had been issued, presents it on 05-06-2024 for realization. The cheque is dishonored with an endorsement “account blocked situation covered in 21 25”. The complainant then begins the process of initiating proceedings against the petitioners for dishonor of the cheque by issuing a notice on 04-07-2024.

2.3. The petitioners sent a reply to the notice, at which point in time the petitioners were not aware of the fact that the account of the petitioners was frozen. They come to know of the same on 26-07-2024. The complainant then registers a private complaint under Section 223 of the BNSS for offence punishable under Section 138 of the Act in PCR No.11453 of 2024. Sworn statement of the complainant is recorded, cognizance is taken and summons are issued in C.C.No.1446 of 2025 on 10-01-2025. Issuance of summons is what has driven the petitioners to this Court in the subject petition.

3. Heard Smt. Sumathi Pauline, learned counsel appearing for the petitioners and Sri Chinmay J. Mirji, learned counsel appearing for the respondent.

4. The learned counsel appearing for the petitioner would vehemently contend that the cheque was not issued against a legally enforceable debt or as compensation. The cheque was only issued until completion of the project. The cheque was dishonoured on account of the endorsement issued of debit freezement, which would mean that the petitioners cannot be hauled up for the proceedings, as the account was frozen and the amount could not be realized by the complainant. The l