TMI Blog1996 (2) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ement arrived between the parties, towards the part payment of the said dues, 3 cheques were issued by the petitioner, one of the cheques being cheque No. 0057511 dated 5-9-1992 drawn on the Goa Urban Co-operative Bank Ltd. for a sum of Rs. 2,00,000/-. The respondent presented the cheque for encashment on 10-9-1992 but the same was returned by the Bank with the endorsement account closed . A lawyer's notice dated 14-9-1992 was followed in pursuance of Section 138 of the Negotiable Instruments Act calling upon the petitioner to pay the said amount within a period of 15 days. The petitioner received the said notice on 14-9-1992. On failure to make payment in consistence with Section 138 of the Negotiable Instruments Act, the respondent preferred a complaint before the learned Judicial Magistrate, First Class, at Quepem. The representative of the Bank and the complainant were examined. It has come out in evidence that the Bank returned the cheque with an endorsement : Account closed on 3-9-92 . None was examined on behalf of the petitioner, but it was apparent in the context of the cross-examination of the prosecution witnesses by and on behalf of the accused that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1992. The account was closed before that date, on 3-9-1992. Therefore, on the date of the presentation of the cheque to the Bank, there was no account and, therefore, Section 138 will not attract. He also relied upon a decision of a single Judge of Kerala High Court in Japahari v. Priya (1994) 1 Crimes 379. He relied upon a casual observation made by the learned single Judge in that judgment in para 8, that complainant should establish that when the cheque was issued accused had an account in the Bank. The learned counsel for the petitioner, however, did not focus on the actual dictum laid down in that decision. He had also referred to para 5 of the judgment which states as follows :- A cheque cannot be issued be hors an account maintained by its drawer with banker. Section 6 of the Act says that a cheque is a bill of exchange drawn on a specific banker. No person can draw a cheque if he does not have an account with a banker. When the cheque is returned by the bank unpaid because of the amount of money standing to the credit of that account is insufficient to honour the cheque, it is open to the holder of the cheque to make demand for payment as indicated in Clause (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances as such circumstances will be manifold in the commercial world under which a cheque could be dishonoured. Legislature wanted in its wisdom to rope in all such circumstances that may originate in future also and that is why it used the word etc. in the sub-title of the Section. Insufficiency of funds is only one of the contingencies that can happen in the commercial transaction which results in dishonouring of a cheque. Therefore the contention of the counsel for the petitioner that Section 138 only takes into account one circumstance, namely, the insufficiency of funds and all other circumstances will fall outside the purview of Section 138 cannot be accepted. 7. It is also equally fallacious that in order to come under the ambit of Section 138 there must be a bank account alive at the time of presentation of a cheque in the bank. In fact, in order to come under the mischief of Section 138, two events alone need be established. First, that cheque drawn on a Bank should be dishonoured by the Banker on its presentation. Mere dishonouring of a cheque cannot implicate the drawer of the cheque under Section 138. The holder of the cheque should bring to the notice of drawer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of cheque to avoid payment, is doing it on his own risk. 8. The observations of the learned Judge of the Kerala High Court that if a cheque is dishonoured on account of closure of an account will not snowball into an offence under Section 138, cannot be accepted in view of the intention and purpose of the legislation. If such a view is accepted, the very credibility and acceptability of the cheque transaction will be in jeopardy. The Court must be more concerned about giving effect to the legislation than paving way for the culprits to escape from the liability by giving a narrow interpretation to Section 138 of the Act and exclude all eventualities except insufficiently of funds. Therefore, I do not find any force in the contention of the counsel for the petitioner that at the time of drawing the cheque, or at the time its presentation, there be an account in the Bank cannot be accepted. Account mentioned therein only relates to the fund not to the cheque and section only recognizes a facility of discharging a debt by issuing a cheque. An account-holder alone will be able to utilise that facility. Here the petitioner perpetrated an evil design by closing the account and is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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