S. No.01

Regular List

HIGH COURT OF JAMMU & KASHMIR AND LADAKH

AT SRINAGAR

CRM(M) No.204/2022

CrlM No.662/2022

Ghulam Mohiuddin Sheikh

…..Petitioner(s)

Through: Mr. R.A Bhat, Advocate

V/s

Haji Bashir Ahmad Dar

….. Respondent(s)

Through: None

CORAM:

HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE

ORDER

27.06.2022

1. The petitioner has challenged complaint filed by the respondent against

him for offence under Section 138 of Negotiable Instruments Act

(hereafter for short <the NI Act=) which is pending before the Court of

Chief Judicial Magistrate Shopian. Challenge has also been thrown to

the order whereby the learned Magistrate has taken cognizance of the

offence and issued process against the petitioner.

2. The only ground urged by the petitioner in this petition is that the

cheque which is subject matter of the complaint, was dishonoured by

the banker not on account of insufficiency of funds but because of the

reason of closure of the account. According to the learned counsel for

the petitioner, as per the provisions contained in Section 138 of the NI

Act, it is only if a cheque is dishonoured due to insufficiency of funds

that the offence is made out against the drawer. It is contended that in

SARVEEDA NISSAR

2022.06.29 13:22

I attest to the accuracy and

integrity of this document

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CrlM No.662/2022

no other case offence under Section 138 of the NI Act can be stated to

have been made out against the drawer of a cheque. In this regard

learned counsel for the petitioner has relied upon the judgment of

Karnataka High Court in the case of Deepa Finance Corporation v.

A.K.Mohammad 2001 CRL.L.J 3582.

3. I have heard learned counsel for the petitioner and perused the record.

4. Admittedly the cheque which is subject matter of the impugned

complaint has been dishonoured due to the reason of closure of the

account and not due to insufficiency of funds. The question arises

whether offence under Section 138 of the NI Act is made out against

the drawer of a cheque when it is found that the cheque has been

dishonoured due to closure of the account.

5. The Supreme Court in the case of Laxmi Dyechem vs. State of Gujarat

and Ors (2012) 13 SCC 375, while dealing with a case where the

cheque was dishonoured on account of mismatch of signatures of the

drawer of the cheque, held that even in the circumstances where there

is mismatch of signatures of the drawer or the account is closed by the

drawer, dishonour of the cheque would be an offence under Section 138

of the NI Act. In this regard it would be profitable to refer to the

observations of the Court made in para 16.1 and 16.2 of the judgment

which are reproduced as under:-

“16.1 This Court has in the decisions referred to above

taken note of situations and contingencies arising out of

deliberate acts of omission or commission on the part of

the drawers of the cheques which would inevitably result

in the dishonour of the cheque issued by them. For

instance, this Court has held that if after issue of the

cheque the drawer closes the account it must be presumed

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2022.06.29 13:22

I attest to the accuracy and

integrity of this document

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that the amount in the account was nil hence insufficient

to meet the demand of the cheque. A similar result can be

brought about by the drawer changing his specimen

signature given to the bank or in the case of a company by

the company changing the mandate of those authorised to

sign the cheques on its behalf. Such changes or alteration

in the mandate may be dishonest or