checque bounce
Querist :
Anonymous
(Querist) 17 June 2011
This query is : Resolved
pl send me the judgement of checque bounce endoerced with ACCOUNT CLOSED, knowingly that account is closed the party has presented the second checque . as per criminal law the party should not present the second checque and it is an offence and not eligible to file 138 of N.I.ACT. pl send me the related judgement of any high court or supreme court to use for final arguments of 138 of N.I.ACT. PLEASE HELP ME IN THIS REGARD.
Querist :
Anonymous
(Querist) 17 June 2011
pl suggest me the proper location of judgement
PALNITKAR V.V.
(Expert) 17 June 2011
I am pasting two judgments. select as per facts of your case.
1.Equivalent citations: I (2008) BC 229, 2007 CriLJ 3800, ILR 2007 KAR 3368
Bench: V Sabhahit
Nagaraja Upadhya vs M. Sanjeevan on 6/6/2007
JUDGMENT
V.G. Sabhahit, J.
1. This appeal by the complainant is directed against the judgment of acquittal passed by the Court of the Addl. Civil Judge (Jr. Dn.,) Udupi, in Criminal Case No. 3325/1997 dated 10-7-2001, wherein the respondent has been acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the 'Act').
The essential facts of the case leading up to this appeal with reference to the rank of the parties before the Trial Court are as follows:
2. The appellant herein filed a private complaint under Section 200 Cr.P.C, against the accused alleging that the accused had borrowed a sum of Rs. 25,000/- from the complainant in January 1996 on the pretext that he needed the money urgently for the medical treatment of his close relative. The complainant lent the money in cash, on sympathetic grounds since he knew the accused for several years. The accused promised to repay the amount within two months and there was no agreement to pay any interest. However, the accused did not bother to repay the amount within two months and after persistent reminders, he issued a Cheque dated 03-06-1997 bearing No. 0076049 of Syndicate Bank Catholic Centre Branch, Udupi, for Rs. 19,750/- and when the said Cheque was presented for payment, the same was returned with the endorsement "account closed". Lawyer's notice was issued on 16-6-1997 and the said notice was served upon the accused and the accused has given an untenable reply instead of complying with the demand and wherefore, the complaint that the respondent has committed the offence punishable under Section 138 of the Act. The Trial Court recorded the statement of the complainant and issued summons to the accused and the accused appeared and pleaded not guilty and claimed to be tried. On behalf of the complainant, the complainant was examined as PW1 and he also examined PW2 to prove the endorsement, Ex.P2 and got marked the documents, Exs.P1 to P5. On behalf of the accused, the accused was examined as DW3 and he also examined DWs. 1 and 2 and got marked the documents, EXs.D1 to D13. The Trial Court after considering the contentions of the Learned Counsel appearing for the complainant-appellant and the accused and appreciating the oral and documentary evidence on record adduced by the parties, held that the complainant has foiled to prove that the respondent-accused has committed the offence punishable under Section 138 of the Act and accordingly, acquitted the respondent-accused of the said offence by thef judgment dated 10-7-2001. Being aggrieved by the said judgment of acquittal, the compalinant has preferred this appeal.
3. I have heard the Learned Counsel appearing for the appellant. Having regard to the contentions urged, the point that arises for determination in this appeal is:
Whether the judgment of acquital passed by the Trial Court calls for interference in this appeal?
I answer the above point for determination in thef negative for the following:
REASONS
4. Learned Counsel for the appellant has taken me through the evidence of PWs.1 and 2 and DWs.1 to 3 and the contents of the documents got marked by the complainant and the accused. Learned Counsel for the appellant submitted that the Trial Court was not justified in acquitting the respondent and material on record shows that the accused has committed the offence punishable under Section 138 of the Act.
5. PW1 -Complainant has reiterated the avermentsf made in the complainant and has produced Exs.P 1 to P5. It is elicited in the cross-examination of PW1 that apart from the transaction in question, he had no other transaction with the accused and the accused has filed a criminal case against him stating that he has committed theft of the cheque and the said case is pending in O.S. No. 558/1997 in Kannanooru Court and he has engaged an Advocate in the said case. It is further elicited in the cross-examination of PW1 that he does not know the relationship of the accused with one T.C. Jayananda and he has maintained the documents regarding the amounts lent by him and the accused had taken loan saying that the amount was required for treatment of this family member and he did not feel like taking any document from the accused while lending the amount and he does not know as to whether the accused and T.C. Jayananda were partners of Vasantha Bakery. It is further elicited in the cross-examination of PW1 that the contents of the cheque have been written in his office and the same is in the handwriting of Nalini, who was an employee in his office and he does not know as to how the accused puts his signature and all the contents of the cheque were filled up by Nalini and he does not know as to whethr the accused had given any intimation to stop payment of the said cheque and it is not true to suggest that a false complaint has been foisted against the accused. PW2-Manger, Syndicate Bank, has stated in his evidence that the memo, Ex.P2," was issued stating that the account was closed and the cheque could not be honoured and it is elicited in his cross-examination that Ex.P2 is not in his handwriting and he does not know as to who had presented the cheque for payment. D W1, who was working as Senior Manager, Syndicate Bank, Udupi, has stated in his evidence that the accused had current account in Catholic branch of Syndicate Bank between 17-9-1985 to 25-6-1996 and he had not received any intimation from the accused and as per the rules of the Bank, the account had been closed by him and he had not issued any notice to the account holder and the account of the accused was closed on 25-6-1996 and Ex.P31 (a) is the acknowledgment which bears the signature of the accused. DW1 has further deposed that he does not know as to whether complaint has been received from the accused stating that one cheque belonging to him had been forged and he does not know as to whether the complainant is having any account in their Bank. It is elicited in the cross-exanimation of DW1 that Ex.P1, cheque is issued in respect of the account of the accused. DW2 is the Advocate who was appearing for the accused in O.S. No. 338/1994 and he has produced Ex.D3, letter written by the accused to him. DW3 is the accused and he has stated in his evidence that Ex.P1 -Cheque does not bear his signature and he had not taken any loan from the complainant nor issued any cheque and his signature has been forged and he has filed a complaint against the complainant. It is clear on re-appreciation of the above said evidence adduced by the parties and the material on record that the account of the accused was closed on 25-6-1996 and the account was not closed on the intimation given by the accused, but, the account was closed as per the rules of the Bank, as spoken to by DW1, which fact has not been controverted in the cross-examination and wherefore, on the date of issue of cheque, Ex.P 1, i.e., 03-06-1997, the accused did not have any account in the Bank in respect of which cheque issued as per Ex.P 1. Further, it is clear from the facts elicited in the cross-examination of PW1 that he has maintained the account regarding lending amount, however, he did not feel like taking any document in respect of the amount lent to the accused and that all the contents of the cheque were written in his office by his employee-Nalini. Therefore, it is clear that the contents of the cheque has been filled up by the employee of the complainant and not by the accused and though the signature of the accused on the cheque is disputed, no steps have been taken to prove that the said signature is that of the accused. In any view of the matter, in view of the fact that on the date of issuance of the cheque, Ex.P1, i.e., 03-06-1997, even according to the complainant, the account of the accused in the Bank had been closed and the account of the accused was closed on 25-06-1996 at the instance of the Bank and not at the instance of the accused, provision of Section 138 of the Negotiable Instruments Act is not attracted in this case. However, this will not preclude the complainant to work out his remedy in accordance with law and on re-appreciation of the evidence on record, I find that the Trial Court has rightly appreciated the above said material on record and has come to the conclusion that the complainant has failed to prove that the accused has committed the offence punishable under Section 138 of the Negotiable Instruments Act and the said judgment of acquittal does not suffer from any error or illegality as to call for interference in this appeal and accordingly, 1 answer the point for determination in the negative and pass the following Order:
The Appeal is dismissed. The judgment of acquittal passed by the Addl. Civil Judge (Jr.Dn.,) and JMFC, Udupi, in Criminal Case No. 3325/1997 dated 10-07-2001 is confirmed.
2.IN THE HIGH COURT OF KERALA AT ERNAKULAM
Crl.Rev.Pet.No. 2204 of 2009()
1. D.K.RAJENDRAN, S/O.KUNHIRAMAN,
... Petitioner
Vs
1. P.K.SAJEENDRAN, S/O.KRISHNAN VAIDYAR,
... Respondent
2. STATE OF KERALA, REPRESENTED BY THE
For Petitioner :SRI.C.P.PEETHAMBARAN
For Respondent : No Appearance
The Hon'ble MR. Justice THOMAS P.JOSEPH
Dated :13/07/2009
O R D E R
'CR'
THOMAS P JOSEPH, J
----------------------------------------
Crl.R.P.No.2204 of 2009
---------------------------------------
Dated this 13th day of July 2009
ORDER
Would closure of an account at the instance of the drawee bank before issuance of cheque take the subsequent dishonour of that cheque as account closed outside the purview of Sec.138 of Negotiable Instruments Act (for short, "the Act")?
2. Petitioner before me faced trial in the court of learned Judicial Magistrate of First Class-1, Kannur in C.C.No.441 of 2000 for offence punishable under Sec.138 of the Act. According to respondent No.1, petitioner borrowed Rs.90000/- from him on 20-03-00 and for repayment of that amount issued Ext.P2, cheque dated 22-05-2000. That cheque was dishonoured on 25-05-2000 as account was closed as proved by Exts.P1 and P3 and evidence of PW.1, manager of the drawee bank. As per his evidence account was closed on 03-08-1999. Respondent No.1 issued notice to the petitioner on 08-06-2000 intimating dishonour and demanding payment of the amount. That notice was served on petitioner on 08-06-2000. Respondent No.1 gave evidence as PW.2 and testified to his case. According to the petitioner, he had given a signed blank cheque to one Ramesan in the year, 1997 in connection with a transaction with him and that cheque was misused.
3. There is a contention in this revision that due execution of Crl.R.P.No.2204 of 2009 2
the cheque is not proved. Regarding the transaction leading to execution of the cheque respondent No.2 gave evidence as PW.2. He asserted that petitioner borrowed Rs.90000/- from him on 20-03-00 and issued the cheque. Though it is contended by petitioner that he had no transaction with respondent No.2 and instead given signed blank cheque to Ramesan in the year, 1997 he neither produced any evidence, nor brought out circumstance to prove or probabilise that contention. It is admitted that Ext.P2 contained signature of petitioner. It is not disputed that the cheque was drawn on the account which petitioner had maintained with the drawee bank. Petitioner did not reply to the notice served on him. In the circumstances courts below have accepted the evidence of respondent No.2 and found in favour of due execution of the cheque. I do not find reason to interfere with that finding .
4. It is contended by learned counsel that in so far as it is not shown that closure of account was on the request or due to any act of petitioner, dishonour of the cheque as account was closed does not come within the purview of the Sec.138 of the Act. Learned counsel has placed reliance on a decision of the Karnataka High Court in Nagaraja Upadhya V M Sanjeevan (2008 (1)KLD 543 (Kart.)).
5. Sec.138 of the Act states thus:
"Where any cheque drawn by a person on an account Crl.R.P.No.2204 of 2009 3
maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of 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, such person shall be deemed to have committed an offence and shall, without prejudice to any provision of this Act, be punished with imprisonment for (a term which may be extended to two years), or with fine which may extend to twice the amount of the cheque, or with both....." To constitute the offence it has to be shown that the cheque is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeded the amount arranged to be paid. In this case, it is not disputed that the account was closed on 03-08-1999 and the case of respondent No.2 which the courts below accepted and which I found, required no interference is that petitioner borrowed the amount from respondent No.2 on 20-03-2000 and in repayment of that amount issued cheque dated 25-05-2000. In short, petitioner has issued the cheque after the account was closed on 03-08-1999. Question is whether in the absence of evidence that closure of the account was on the request or due to any act of the petitioner it can be Crl.R.P.No.2204 of 2009 4
said that the dishonour attracted Sec.138 of the Act.
6. The Supreme court in NEPC Micon Ltd V Magma Leasing Ltd. (AIR 1999 SC 1952) has stated that "Cheque is dishonoured as the amount 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 amount is insufficient to honour the cheque" is a genus of which the expression "that account being closed" is 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 to another offence, it would certainly be an offence under Sec.138 as there was insufficient or no fund to honour the cheque in ' that account'. Reading Secs. 138 and 140 together, it would be clear that dishonour of the cheque by a bank on the ground that account is closed would be covered by the phrase "the amount of money standing to the credit of that account is insufficient to honour the cheque". When the cheque is returned by a bank with an endorsement 'account closed' i, it would amount of money standing to the credit of that account is insufficient to honour the cheque" as envisaged in Sec.138 of the Act. Crl.R.P.No.2204 of 2009 5
As per the above decision closure of the account is an eventuality after the entire amount is withdrawn and it meant that there was no amount in the credit of that account. This court in Salim V Thomas (2004(1) KLT 816) considered the case where account was closed before the issuance of the cheque. Relying on the decision above referred this court held that in such situation also the dishonour attracted Sec.138 of the Act.
7. In Nagaraja Upadhya's case referred Supra, the Karnataka High Court held that,
".... in any view of the matter, in view of the fact that on the date of issuance of the cheque, Ext.P1, ie., 03/06/1997, even according to the complainant, the account of the accused in the Bank had been closed and the account of the accused was closed on 25-06- 1996 at the instance of the Bank and not at the instance of the accused, provision of Sec.138 of the Negotiable Instruments Act is not attracted in this case....."
It is not clear on what reasoning the view was taken that when the account was closed at the instance of the Bank, Sec.138 of the Act is not attracted. I have referred to the decision of the Supreme Court in NEPC Micon Ltd's case where it is held that "the expression "the amount of money standing to the credit of that account is insufficient Crl.R.P.No.2204 of 2009 6
to honour the cheque" is a genus of which the expression "that account being closed" is specie"
8. When an account is closed it meant that there is no money standing to the credit of the holder of that account in the bank concerned. Tannan's Banking-Law and practice in India (Vol-I) states that an account could be closed in the following circumstances:
1. Notice given by the account holder to the banker of his intention to close the account.
2. Closure by the bank in special cases.
3. Death of the account holder
4. Insanity of account holder
5. Insolvency of account holder
6. Order of the court
7. Notice received by the banker of an assignment made by the account holder of his credit balance.
When the account holder closes his account, the contract is terminated. The bank pays the balance amount in the bank to the account holder on his closing the account. After the closure of the account the relationship of the banker and account holder comes to an end and neither party is under any obligation to the other, except the banker's duty of secrecy. When the account holder closes his account, he is generally not bound to give any special notice of his intention to Crl.R.P.No.2204 of 2009 7
close the account. But when the banker choses to close the account on its own, notice to the account holder is needed. The bank has to honour the cheques drawn by the account holder before he receives such notice. Even when the account is closed at the instance of the banker, the latter has to return the money standing to the credit of the account holder, and he is asked to return the unused cheque leaves suppled to him. When the account is closed due to the death of the account holder the balance amount in the account is paid to the nominee of the account holder and if there is no nomination, to the legal representative. In the case of closure of account due to insanity of the holder of the account, the balance amount is paid to the guardian if any appointed for the property of the account holder.
9. Thus when the account is closed, be it at the instance of the banker or at the instance of the holder of the account, the balance amount if any standing to the credit of the holder of the account is to be returned to him or other person entitled to receive the same on his behalf. Hence if a cheque is issued after the account is closed, whether the closure is at the instance of the holder of the account or at the instance of the bank the cheque cannot be honoured as there is no money standing to the credit of the drawer of the cheque and necessarily the cheque will be dishonoured for the reason that account is closed which meant that the drawer of the cheque has no money Crl.R.P.No.2204 of 2009 8
standing to his credit in that bank. In the above view of the matter, I am unable to share the view expressed by the Karnataka High Court in Nagaraja Upadhya's case. So far as offence punishable under Sec.138 of the Act is concerned it makes no difference whether the account was closed at the instance of or due to any act of drawer of the cheque or at the instance of the bank. I am not referring to a situation where account was closed at the instance of the banker, there was sufficient fund in the account, the cheque was issued before the Banker served notice on the holder of the account regarding closure of account and the cheque was dishonoured as account was closed. As such it was not necessary for respondent No.1 to show that account was closed at the instance of petitioner. Dishonour of the cheque as account was closed, closure of the account being prior to issuance of the cheque notwithstanding attracted sec.138 of the Act. On going through the judgments under challenge I find no reason to interfere with the conviction of the petitioner.
10. Learned magistrate sentenced the petitioner to undergo simple imprisonment for one year and directed payment of compensation of Rs.100000/- (Rupees One Lakh Only) to respondent No.2. Default sentence of imprisonment for three months was also provided. Learned Additional Sessions Judge while confirming conviction modified the sentence as fine of Rs.1,00,000/- and provided Crl.R.P.No.2204 of 2009 9
default sentence of imprisonment of three months. Having regard to the nature of offence and object of legislation I do not find reason to interfere with the sentence as modified by the appellate court.
11. Learned counsel requested that petitioner may be granted six months' time to deposit the fine in the trial court. Learned counsel says that petitioner, on account of financial difficulties is unable to raise the amount immediately. Having regard to the circumstances stated by learned counsel and the amount involved I am inclined to grant time till 30-12-09 to deposit fine in the trial court as ordered by the appellate court.
Resultantly this revision fails and it is dismissed. Petitioner is granted time till 30-12-09 to deposit the fine in the trial court. Petitioner shall appear in the trail court on 31-12-09 to receive the sentence. Execution of warrant if any against the petitioner will stand in abeyance till 31-12-09.
THOMAS P JOSEPH, JUDGE
Sbna/
prabhakar singh
(Expert) 17 June 2011
TO WHICH SIDE YOU ARE REPRESENTING,ACCUSE OR COMPLAINANT???????
Ravikant Soni
(Expert) 17 June 2011
second presentation of cheque or presentation of second cheque??
DEFENSE ADVOCATE.-firmaction@g
(Expert) 17 June 2011
