Re presentation of Bounced Cheque

Nirmaan Shyamsukha (Querist) 11 March 2010 This query is : Resolved
Can a bounced cheque on account of closed account can be presented again for the purpose of filing case under section 138 of Negotiable Instruments Act, 1881?

Can a bounced cheque on account of closed account can be presented again ?

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Parveen Kr. Aggarwal (Expert) 11 March 2010
Although there is no legal bar in presentation of a cheque dishonoured on the ground of 'account closed' yet practically it seems illogical that such cheque is again presented on the assurance of the accused. If the complainant comes to know that the account is closed then why he will present the cheque again. Practically no payee would present again a cheque which has already been dishonoured on account of 'account closed' for getting payment thereof. In such a case, the only inference which can be drawn is that the cheque was presented again for creating a cause of action and this benefits the accused.

Kumar Thadhani (Expert) 11 March 2010
Yes I do agree with expertMr. Parveen.

B K Raghavendra Rao (Expert) 11 March 2010
Bounced Cheques issued on a closed account does not fall within the ambit of Section 138 of NI Act. It should be a running account and the cheque should have bounced for not maintaining sufficient funds in that account. At the best, it would amount to cheating under IPC.

Nirmaan Shyamsukha (Querist) 11 March 2010
Thank you Mr.B K Raghavendra Rao

Nirmaan Shyamsukha (Querist) 11 March 2010
Thank you expert Praveen

Raj Kumar Makkad (Expert) 11 March 2010
I do not agree with the opinion of Rao or Parveen. There are clear citations of SC that the cause of action accrues to the complainant only on the issuance of the cheque and its non compliance by accused person. In the given case no notice has been issued and cheque has been re-produced, this is not fatal for the complainant and he can after second presentation also can serve mandatory notice if the cheque is submitted within limitation. So it attracts 138 NI Act.

B K Raghavendra Rao (Expert) 11 March 2010
Existence of a "live account" at the time of issue of cheque is a condition precedent for attracting penal liability for the offence under Section 138. A cheque cannot be issued without an account maintained by its drawer with the banker. Section 6 of the NI Act says that a cheque is a bill of exchange drawn on a specified 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 account of money standing to the credit of "that account" is insufficient to honour the cheque, it is open to the holder of trhe cheque, to make demand for payment as indicated in clause (b) of the proviso. The words "that account" in the section denote to the account in respect of which the cheque was drawn. For the offence under section 138 there must have been an account maintained by the drawer at the time the cheque was drawn.

Japahari V. Priya
1994(1) Crimes 379 (ker)
Shivendra Sanaguiri Vs. Adineo
1996 Cri LJ 1816 (Bom)

Guest (Expert) 11 March 2010
Today i learn a lot from learned experts. Thanks respected experts for being here. Regards. Ajitabh,

Bhumik Dave (Expert) 11 March 2010
well describe by ld. thanks

Parveen Kr. Aggarwal (Expert) 12 March 2010
Mr. Raj Kumar Makkad,

When a cheque is returned dishonoured to the payee as the account whereon it has been drawn is closed then why a person will present the same again when there is no scope for its payment because the payee already knows that no such account exists. How can the payment from that account be received. Will the complainant aver in the complaint that the accused had assured him after first presentation that he will get the same account revived. Is it possible to re-open a closed bank account and even if the accused gives such an assurance is it possible that the complainant will believe? Does court not consider all these aspects while trying a complaint?

Nirmaan Shyamsukha (Querist) 15 March 2010
Thank you all the experts

N RAMESH. (Expert) 15 March 2010
In the matters of cases under section 138 of N.I.Act law is changing with time. Therefore reference of 1996 case is no use.

Now all the high courts have taken a view that dishonour of cheque for "account closed" is an offence.

I agree with shri.Makkadji.

see the following judgment

http://delhicourts.nic.in/Oct07/Shyam%20Gopal%20Gupta%20Vs.%20Sanjeev%20Bhargava.pdf

M/s. Y-not legal services (Expert) 09 October 2010
You can't represent a closed accound's cheque.. I mean once if a cheque returned being reason as account closed mean you have to issue legal notice. Except that you can't represent second time for collection..

Re presentation of Bounced Cheque

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