Sec. 138 of N.I.Act

chiranjib mukherjee (Querist) 02 July 2008 This query is : Resolved
'A' issed a cheque in favour to 'B' and when 'B' deposited the said cheque in the bank, the bank returned the cheque with endosement " no existence of this account". Will it attract sec. 138 N.I.Act?

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H. S. Thukral (Expert) 02 July 2008
yes. In a case where the endorsement was 'suit filed account' it came under the mischief. Section 138 was applicable. 'No existence of account' means he has closed the account. A person after issuing a cheque if closes the account or issues a cheque knowing well that it will not be honoured can not come out of the scope of section 138.

Srinivas.B.S.S.T (Expert) 03 July 2008
Yes account closed, no existence of account or payment stopped by drawyer will all come under the section 138 of NI Act

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