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2022 (1) TMI 9 - HC - Indian LawsDishonor of cheque - incomplete signatures - primary ground that has been urged by the petitioners is that the complaint and the order of issuing process is not legally tenable as the dishonor of cheque due to mismatch of signatures or incomplete signatures does not constitute an offence under Section 138 of the NI Act - HELD THAT:- It is clear that an offence under Section 138 of the NI Act is constituted when a cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge of any debt, is returned by the bank unpaid either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank. At first blush, it appears that it is only in two situations that Section 138 of the NI Act is attracted, firstly when there are insufficient funds available in the bank account of the person who is drawing the cheque and secondly where it exceeds the arrangement. In VINOD TANNA & ANR. VERSUS ZAHEER SIDDIQUI & ORS. [2001 (9) TMI 1078 - SUPREME COURT], the Supreme Court, while dealing with a case where the cheque drawn by the accused was not been honoured by the bank on account of drawer’s signatures being incomplete, held that dishonour of cheque for the aforesaid reason would not constitute an offence under Section 138 of the NI Act and, accordingly, the criminal proceedings against the accused were quashed. The aforesaid decision of the Supreme Court came up for consideration before the same Court in the case of Laxmi Dyechem vs. State of Gujarat and others, [2012 (12) TMI 106 - SUPREME COURT]. The Supreme Court in the aforesaid decision did not follow the ratio laid down in Vinod Tanna’s case [2001 (9) TMI 1078 - SUPREME COURT],. - The Supreme Court on the basis of the aforesaid observations and the ratio, while dealing with a case in which the cheques were dishonoured by the bank on the ground that drawer’s signatures were incomplete and that no image was found or that the signatures did not match, came to the conclusion that criminal prosecution against the accused in such cases should be allowed to proceed and the judgment and orders passed by the High Court quashing the criminal proceedings were set aside. Both the judgments of the Supreme Court in Vinod Tanna’s case as well as in Laxmi Dyechem’s case (supra) have been rendered by the Benches of co-equivalent strength. The judgment rendered in Laxmi Dyechem’s case is latest in point of time, wherein the ratio laid down in Vinod Tanna’s case has been termed as per incuriam. Therefore, as per law of precedents, the ratio laid down in Laxmi Dyechem’s case has to be followed. Accordingly, as per the ratio laid down in Laxmi Dyechem’s case, the contention of the petitioners that in the instant case offence under Section 138 of the NI Act is not constituted because the cheques were dishonoured on account of incomplete signatures and not for the reason of insufficiency of funds or exceeding the arrangement, deserves to be rejected. The trial court is directed to proceed further in the matter in accordance with law. - The petition (of the accused) is found to be devoid of merit and the same is dismissed.
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