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Issues Involved: Application seeking leave to prefer appeal against the order of acquittal for the offence u/s 438 of Negotiable Instruments Act.
The Appellant sought leave to appeal against the order of acquittal u/s 438 of the Negotiable Instruments Act, pertaining to two cheques issued by the accused towards outstanding dues. The drawee Bank returned the cheques unpaid with an endorsement from the Crime Branch. The Appellant contended that despite the presumption of sufficient funds, the accused failed to make payment after the statutory notice, thus violating Section 138 of the Act. To establish the offence u/s 138 of the Negotiable Instruments Act, certain conditions must be met, including the cheque being drawn on the drawer's account for payment to another party, issued to discharge a debt, and returned unpaid due to insufficient funds or exceeding the arranged amount. The issuance of a notice demanding payment within 30 days, followed by the drawer's failure to pay within 15 days, is crucial. If the cheque is dishonoured for reasons other than insufficient funds, the drawer cannot be held liable u/s 138. The Appellant argued that even if the accused closed the account or issued a stop payment notice, it falls under Section 138 as it disrupts the payment arrangement. Citing a relevant case, it was noted that closing the account before presenting the cheque constitutes dishonour for insufficient funds. However, in the present case, there was no evidence of insufficient funds or account closure by the accused. The involvement of the Crime Branch, not at the accused's behest, in directing the Bank to refuse cheque clearance absolved the accused of responsibility as he had no control over such actions. The absence of crucial elements for the offence u/s 138 led to the Metropolitan Magistrate's rightful acquittal of the accused. The Court found no justification to grant leave for an appeal against the acquittal, resulting in the rejection of the application.
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