The second presentation of a cheque after dishonour due to 'account closed' is impermissible if statutory notice is not issued within the required timeframe, rendering the case unmaintainable.

ORDER

This Criminal Original Petition is filed to call for the records in S.T.C.No.421 of 2016 on the file of Judicial Magistrate No.II, Salem and to quash the same.

2. The case in S.T.C.No.421 of 2016 was filed under Section 200 of Criminal Procedure Code read with Section 138 of the Negotiable Act, 1881.

3. The petitioner is an accused in the case. The allegations against the petitioner is that the respondent/complainant, on the request of the petitioner/accused lent him a sum of Rs.2,50,000/- on 01.08.2015 to meet the urgent family and business expenses. The petitioner agreed to pay the amount with interest at 18% per annum. Petitioner borrowed another amount Rs.2,50,000/- from the respondent on 01.09.2015 for her urgent family and business necessity and agreed to repay the same with interest at 18% per annum to the respondent/complainant. After repeated demands, petitioner issued a cheque in favour of the respondent on 01.02.2016 for Rs.5 lakhs drawn on Karur Vysya Bank Limited, Salem. The cheque Number is 284360. As per the request of the petitioner, the respondent presented the cheque for collection on 28.03.2016 in Indian Overseas Bank, V.S.A.Complex, Near New Bus stand, Leigh Bazaar branch, Salem. But the cheque was dishonoured on 29.03.2016 on the ground that "account closed". The respondent/complainant caused a legal notice dated 26.04.2016 to the petitioner/accused calling upon her to pay the amount within 15 days from the date of receipt of this notice. The notice was received by the petitioner on 27.04.2016. Instead of paying the cheque amount, petitioner sent a reply notice containing false allegations. Therefore, this case is filed.

4. Petitioner filed this quash petition on the ground that the cheque bearing No.284360 dated 01.02.2016 was presented by the respondent on 02.02.2016 and the same was returned for the reason "account closed". Without issuing the statutory notice, respondent again presented the cheque on 28.03.2016. This time also the cheque was returned with the same endorsement "account closed" on 29.03.2016. Only thereafter, respondent issued the Statutory notice on 26.04.2016. Petitioner gave a suitable reply on 10.05.2016 and this complaint came to be filed on 13.05.2016.

5. It is further submitted that when a cheque was returned on 03.02.2016 for the reason "account closed", the respondent ought to have issued legal notice within 30 days from the date of receipt of memo from the Bank. That was not done in this case. Having failed to give statutory notice within the stipulated period, the respondent again presented the cheque on 28.03.2016 for the purpose of savings the limitation. The second presentation after the return of the cheque on the ground "account closed" is illegal and it was made only for the purpose of saving limitation and therefore this case has to be quashed.

6. In support of the case, the learned counsel for the petitioner has relied on the following judgments:-

(i) (1999) 4 Supreme Court Cases 253 [ NEPC MICON LTD and others Vs.MAGMA LEASING LTD ] it has been held that:

"The return of a cheque by the bank unpaid on the ground that the "account is closed" would mean that the cheque is returned as unpaid on the ground that "the amount of money standing to the credit of that account is insufficient to honour the cheque". The reason is that the cheque was dishonoured as the amount of money standing to the credit of "that account" was "nil"at the relevant time apart from it being closed. The closure of the account would be an eventuality after the entire amount in the account is withdrawn. It means that there was no amount in the credit of "that account" on the relevant date when the cheque was presented for honouring the same. The expression "the amount of money is insufficient to honour the cheque" is a genus of which the expression "that account being closed"is a specie. After issuing the cheque drawn on an account maintained, if the drawer closes "that account"apart from the fact tha