TMI Blog2003 (7) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... shonoured on account of the closure of the account on which it was drawn, even prior to its drawal. The decisions of this Court in Joseph v. Philip Joseph [2000] 2 KLJ 679 and Japahari v. Priya [1993] 2 KLT 141 indicate that the account on which the cheque was drawn shall be maintained by the drawer at the time of drawal of the cheque to attract the said provision. It has been further held that section 138 of the Act will not be attracted if the cheque has been drawn after the closure of the account. But, when the matter came up before the learned Single Judge, a decision by the Bombay High Court in Shivendra v. Adineo 1996 Cri. LJ 1816 was pointed out. In that decision it was held that it was immaterial whether the account had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly be in the affirmative because the cheque is dishonoured as the amount of money standing to the credit of that account was nil at the relevant time apart from it being closed. Closure of the account would be an eventuality after the entire amount in the account is withdrawn.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 standing to the credit of that account 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, a person, if he closes that account apart from the fact that it may amount t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the drawal of the cheque, since the requirement of section 138 is drawal of a cheque in respect of an account maintained, whether in past or in present with reference to the time of drawal of the cheque. 3. It is worthwhile to quote from Goaplast (P.) Ltd. s case ( supra ), being contextually apt for this case, as follows : ". . . For appreciating the issue involved in the present case, it is necessary to refer to the object behind introduction of Chapter XVII containing sections 138 to 142. This Chapter was introduced in the Act by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (Act 66 of 1988) with the object of inculcating faith in the efficacy of banking operations and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than weakened. Provisions contained in sections 138 to 142 of the Act are intended to discourage people from not honouring their commitments by way of payment through cheques. It is desirable that the Court should ban in favour of an interpretation which serves the object of the statute. The penal provisions contained in sections 138 to 142 of the Act are intended to ensure that obligations undertaken by issuing cheques as a mode of payment are honoured. A post-dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. A cheque is a well-recognized mode of payment and post-dated cheques are often used in various transactions in daily life. The purpose of a post-dated cheque is to provide some accom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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