ACCOUNT CLOSED ... N.I.Act

Sir,

 As per your opinion A complaint (case) should ALSO & ALWAYS be filed u/s 420 (IPC) against the Accused, in matters of 138 (N.I.Act).

wether Two cases can be File for one offeence.

Mr. Agarwal, Sec 420 is cheating and the sec says that there must be intention at the inception. ie at the begining when the complainant is made to deliver property (may be money in this case). Only then sec 420 IPC is attracted. But in cheque cases if it is issued when the amount is received or delivered,with an intention to cheat only then sec 420 would get attracted. But when cheque is issued on a later date when demand is made and as DISCHARGE OF DEBT then the question of 420 does not arise.

Offence should ALSO be filed u/s 420 (IPC), simultaneously alongwith N.I.Act (u/s 138). (dishonest & deliberate (malicious) intention to cheat).

Note,  u/s 420 (IPC) offence compoundable.

HOWEVER, u/s 138 (N.I.Act) offence is compoundable (sic)

uner section 147 of the Ni Act the both partyies willing to copromise the offence is compoundble

"mehbub" & "Neeraj Arora" :

The moment the cheque is dishonoured, the preamble of "dishonesty" & "cheating" is fulfilled. The IPC is an independent Act irrespective of the N.I.Act.  Cases can run concurrently and independently, under both the Acts and there is no bar to filing two individual cases (i.e. one under N.I.Act and one under IPC.).  Both Cases to be filed seperately in the same court, BUT certainly after demand notice period expires.

EVEN if the offence is "eventually" compounded,  (repeat  "eventually") under the N.I.Act,  it is actually  compounded by virture of out-of-court settlement (read compromise between the parties). However the case filed u/s 420 of IPC won't be compounded irrespective of  compromise between both the parties, since the criminal motive of "cheating with intent" is proved by default after the demand notice period.

However the complaint may withdraw the complaint u/s 420 IPC, but before actual order of MM in matter of IPC case. After order of MM, the offence u/s 420 is not compoundable.

Under the N.I.Act, the cheque (which is a demand note), payment should be made on the due date, by default.  If the cheque is dishonoured,  it will also amount to "Criminal Breach of Trust" (u/s 405 IPC), which itself is "Cheating" with deliberate & malicious intention u/s 420 IPC.

The N.I.Act, only provides a precautionery remedial measure to dissolve the "dishonesty & cheating" by giving a further chance to the accused (drawer) to pay back the cheque amount during demand notice period, but the motive of "dishonesy & cheating" u/s 420 IPC, does not get diluted. At the end of the demand notice period, the accused (drawer) is a confirmed "cheater" by virtue of the wording u/s 138 N.I.Act.  No further evidence is required, even u/s 420 IPC.

"L.Chandra Mohan Reddy" :

i) Note,  u/s 420 (IPC) offence is NOT compoundable.

ii) Please note that ONLY & ONLY the complainant party (and NOT the accused) has got the RIGHT to offer to compound the offence.  AND  "NOT" both the parties.  Even after compromise by both the parties, the MM has the discretionery jurisdiction to levy a penalty of upto 5000/- on the accused, irrespective of the offence being offered for "compounding" by the complaintant.

Keep Smiling ... HemantAgarwal

dear haemant ji. THERE'S NO SECOND OPINION THAT TWO CASES CAN BE FILED 1) U/S 138 NI ACT AND 2)U/S 420 IPC. THERE R DECISIONS IN THIS REGARD. BUT THE QUESTION UNLESS THE INTENTION OF CHEATING OR TO CHEAT OR DISHONEST INTENTION "EXISTS AT THE TIME OF GETTING THE MONEY ie, MAKING THE COMPLAINANT TO DELIVER GOODS OR MONEY SEC 420 WILLNOT GET ATTRACTED. PLS SEE THE DEFINITION AND RELEVANT DECISIONS U/S 420.

BUT U/S 138 THE ACT BECOMES AN OFFENCE ONLY WHEN THE ACCUSED FAILS TO PAY THE AMOUNT WITHIN TIME AFTER NOTICE. SO THERE IS NO PRESUMPTION THAT HE HAD INTENTION OF CHEATING AND MADE THE COMPLAINANT TO DELIVER GOODS. BOTH REQUIRE INDEPENDANT PROOF AND EVIDENCE. NI ACT IS SPECIAL LAW AND IPC IS PENAL LAW. PENAL LAW DOESNOT GIVE WAYS TO PRESUMPTION OF GUILT AND REQUIRES STRICT PROOF. SO, I SAID THAT UNLESS THE INTENTION OF CHEATING IS PROVED TO BE PRESENT AT THE TIME OF MAKING THE COMPLAINANT TO DELIVER MONEY OR GOODS, THE OFFENCE U/S 420 WOULD FAIL.

Mehbub :

Let me put it this way : 

Normally a case is filed u/s 138 N.I.Act, for dishonour of cheque, after enactment of s.138 in year 1990.

Now this time a case is filed u/s 420 of IPC Act, for cheating. AND not u/s 138 N.I.Act.

WHAT Happens :

Dishonouring of cheque is = equal to Cheating with intention, FROM DAY ONE.  The dishonoured cheque is final and conclusive evidence to show that Cheating has occured, with intention.

Not honouring a PRE-DETERMINED   agreement & commitment is equal to  "Intentional Cheating"

If the act of giving a cheque was not a "pre-determined" event, then the component of "intention" may not arise. But here the drawer knows that a cheque is given for amount and would have to be cleared on so-so date.  AND knowingly (intentionally the actual component  that is required u/s 420 IPC)  the drawer (accused) prefers to have it purposely dis-honoured on the said specific "pre-determined" date.

Please note that  the word "intention" is linked to  "pre-determined"  and "pre-planning" and "on-purpose"  components.  You cannot have a "intention" which is not "pre-determined" or "pre-planned".  IF there is one, please let me know about it with examples !

Since the Act of giving a dated cheque expressly implies that payment will be honoured on that cheque date.   By not keeping sufficient balance in the account on that date is implied expressly that the drawer intentionally did not want to honour his commitment AND THAT IS EXPRESSELY AND IMPLIED  "CHEATING".

? What other reasons can the drawer (accused) give for dishonour of the cheque.

? Such reasons & excuses is permittable under N.I.Act, BUT NOT under IPC.

The N.I.Act may have provisions to compound the offence subject to conditions. BUT the IPC (specifically u/s 420) does not have any provisions to compound the offence.

Keep Smiling ... HemantAgarwal

Mehbub :

Let me put it this way : 

Normally a case is filed u/s 138 N.I.Act, for dishonour of cheque, after enactment of s.138 in year 1990.

Now this time a case is filed u/s 420 of IPC Act, for cheating. AND not u/s 138 N.I.Act.

WHAT Happens :

Dishonouring of cheque is = equal to Cheating with intention, FROM DAY ONE.  The dishonoured cheque is final and conclusive evidence to show that Cheating has occured, with intention.

Not honouring a PRE-DETERMINED   agreement & commitment is equal to  "Intentional Cheating"

If the act of giving a cheque was not a "pre-determined" event, then the component of "intention" may not arise. But here the drawer knows that a cheque is given for amount and would have to be cleared on so-so date.  AND knowingly (intentionally the actual component  that is required u/s 420 IPC)  the drawer (accused) prefers to have it purposely dis-honoured on the said specific "pre-determined" date.

Please note that  the word "intention" is linked to  "pre-determined"  and "pre-planning" and "on-purpose"  components.  You cannot have a "intention" which is not "pre-determined" or "pre-planned".  IF there is one, please let me know about it with examples !

Since the Act of giving a dated cheque expressly implies that payment will be honoured on that cheque date.   By not keeping sufficient balance in the account on that date is implied expressly that the drawer intentionally did not want to honour his commitment AND THAT IS EXPRESSELY AND IMPLIED  "CHEATING".

? What other reasons can the drawer (accused) give for dishonour of the cheque.

? Such reasons & excuses is permittable under N.I.Act, BUT NOT under IPC.

The N.I.Act may have provisions to compound the offence subject to conditions. BUT the IPC (specifically u/s 420) does not have any provisions to compound the offence.

Keep Smiling ... HemantAgarwal

Mehbub :

Let me put it this way : 

Normally a case is filed u/s 138 N.I.Act, for dishonour of cheque, after enactment of s.138 in year 1990.

Now this time a case is filed u/s 420 of IPC Act, for cheating. AND not u/s 138 N.I.Act. (and subject to condition that cheque is given in discharge of a debt and not gift or loan or ...)

WHAT Happens :

Dishonouring of cheque is = equal to Cheating with intention, FROM DAY ONE.  The dishonoured cheque is final and conclusive evidence to show that Cheating has occured, with intention.

Not honouring a PRE-DETERMINED   agreement & commitment is equal to  "Intentional Cheating"

If the act of giving a cheque was not a "pre-determined" event, then the component of "intention" may not arise. But here the drawer knows that a cheque is given for amount and would have to be cleared on so-so date.  AND knowingly (intentionally the actual component  that is required u/s 420 IPC)  the drawer (accused) prefers to have it purposely dis-honoured on the said specific "pre-determined" date.

Please note that  the word "intention" is linked to  "pre-determined"  and "pre-planning" and "on-purpose"  components.  You cannot have a "intention" which is not "pre-determined" or "pre-planned".  IF there is one, please let me know about it with examples !

Since the Act of giving a dated cheque expressly implies that payment will be honoured on that cheque date.   By not keeping sufficient balance in the account on that date is implied expressly that the drawer intentionally did not want to honour his commitment AND THAT IS EXPRESSELY AND IMPLIED  "CHEATING".

? What other reasons can the drawer (accused) give for dishonour of the cheque.

? Such reasons & excuses is permittable under N.I.Act, BUT NOT under IPC.

The N.I.Act may have provisions to compound the offence subject to conditions. BUT the IPC (specifically u/s 420) does not have any provisions to compound the offence.

Keep Smiling ... HemantAgarwal

APOLOGIES,   for the repeated postings.

Some Internet connection problems.

Keep Smiling ...HemantAgarwal

hemant ji:

There is no 2nd opinion that sec 420 MAY be clubbed togethr with sec 138 NI ACT.

BUT not in all the cases. PLEASE REFER ILLUSTRATION (d) OF SEC 415 IPC. To attract sec 420 there must be delivery of property when the cheque is issued. for example. IF THE ACCUSED PURCHASES ANYTHING AND MAKES PAYMENT BY CHEQUE THAT LATER BOUNCES, THEN HE INDUCES OR MAKES THE OTHER TO DELIVER GOODS ON ISSUEANCE OF CHEQUE, SIMILARLY WHEN THE ACCUSED MAKES A PERSON TO GIVE MONEY BASED ON THE ISSUANCE OFCHEQUE (MAY BE BORROWING MONEY BY GIVING POST DATED CHEQUE) HERE AGAIN THE ACCUSED INDUCES OR MAKES HIM GIVE AWAY THE MONEY BASED ON THE CHEQUE.

YET ANOTHER EXAMPLE CAN BE, IF THE ACCUSED GIVES CHEQUE FOR THE DISCHARGE OF EARLIER DEBT AND INSISTS THE CREDITOR TO ISSUE RECEIPT FOR THE DISCHARGE OF DEBT AND THE CREDITOR DOES SO BASED ON THE CHEQUE, THEN AGAIN THERE IS DELIVERY OF ARTICLE(RECEIPT) OR DOING OF AN ACT WHICH THE CREDITOR WOULD NOT DO OTHERWISE ie., IN THE ABSENCE OF ISSUANCE OF THE CHEQUE BY THE ACCUSED.

HENCE IN THE ABOVE CIRCUMSTANCES THE ACCUSED CAN BE SAID TO HAVE INDUCED TO DELIVER ANDY ARTICLE OR GOODS AND HENCE SEC 420 IS ATTRACTED.

BUT, IF THE CHEQUE ALONE IS ISSUED ON A LATER DATE FOR DISCHARGE OF EARLIER DEBT AND NO RECEIPT IS PASSED BY THE COMPLAINANT THEN THE DEFN. U/S 415 IS NOT ATTRACTED AND SO SEC 420 CANNOT BE INVOKED.

IT IS NOT THAT WHETHER SEC 420 MAY BE CLUBBED IN ALL CASESOR NOT?  BUT THE QUESTION IS WHETHER THE OFFENCE U/S 420 WOULD BE MADE OUT IN ALL CAES OF CHEQUE DISHONOUR? AS DEFINED IN IPC.

SO MY HUMBLE OPINION IS THAT ONLY IN SUCH CIRCUMSTANCES AS DEFINED U/S 415 IPC OFFENCE U/S 420 WOULD BE MADE OUT AND NOT IN ALL THE CASES. HENCE SEC 420 CANNOT BE MADE OUT IN ALL THE CASES.

FOR SEC 420 THE CAUSE OF ACTION IS ON THE DATE OF DELIVERY OF MONEY AND FOR 138 IT IS THE DATE OF DEFAULT OF PAYMENT.

HOPE I HAVE MADE MYSELF CLEAR.

I HAVE NOT DEALT WITH THE COMPUNDABILITY OF THE OFFENCE.

Respected Sir,

Pls give any Supreme Court rulings regarding the cheque dishonoured due to the reason of account closed.I also filed a complaint under S.420.In thi case when I gave money at the same time the cheque issued by the drawer to me.Iam first time visit this lawyers club.

                                              Thank you all

Pls give any Supreme Court rulings regarding the cheque dishonoured due to the reason of account closed

 SC judgements on a/c closed:

CASE NO.: Appeal (crl.) 293 of 2001

ASHOK YESHWANT BADAVE Vs. SURENDRA MADHAVRAO NIGHOJAKAR & ANR.

DATE OF JUDGMENT: 14/03/2001

BENCH:

K.T. Thomas, R.P. Sethi & B.N. Agrawal

CASE NO.: Appeal (crl.) 206 of 2002

A.V. MURTHY Vs. B.S. NAGABASAVANNA

DATE OF JUDGMENT: 08/02/2002

BENCH:

R.P. Sethi & K.G. Balakrishnan

CASE NO.: Appeal (crl.) of 2003

Goaplast Pvt. Ltd. vs. Shri Chico Ursula D’Souza & Anr.

DATE OF JUDGMENT: 07/03/2003

BENCH:

M.B. SHAH & ARUN KUMAR

CASE NO.: Appeal (crl.) 1012 of 1999

M.S. Narayana Menon @ Mani vs State of Kerala & Anr.

DATE OF JUDGMENT: 04/07/2006

BENCH:

S.B. Sinha & P.P. Naolekar