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2019 (10) TMI 362 - HC - Indian LawsDishonor of Cheque - Non-existence of bank account - offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - petitioners submit that in the instant case their bank account had closed in the year 2017 and they had informed the respondent of the same and in as much as there was no cheque drawn by the petitioner on an account maintained by them, the complaint of the respondent is not maintainable. HELD THAT - The aspect of the closure of the bank account of the petitioner prior to the issuance of the cheque, is a matter which cannot be determined without trial and thus, it is held that there is no infirmity in the impugned order dated 01.05.2019 of the learned MM-04, (NI Act) NDD/PHC, New Delhi District in CC No.6337/2019, whereby the cognizance of the alleged commission of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 has been taken only against the petitioner no.2 herein. Petition dismissed.
Issues Involved:
1. Quashing of Complaint Case No. 6337/2019 2. Validity of Section 138 of the Negotiable Instruments Act, 1881 3. Closure of Bank Account and its Implications 4. Admissibility of Evidence and Trial Requirements Detailed Analysis: 1. Quashing of Complaint Case No. 6337/2019 The petitioners sought the quashing of Complaint Case No. 6337/2019 and the proceedings emanating therefrom, pending before the MM-04, Patiala House Courts, New Delhi, as well as the quashing of the order dated 01.05.2019. The learned Trial Court had taken cognizance of the alleged commission of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, against the petitioner no. 2, while noting that the proprietorship firm was a non-juristic personality and thus not summonable. 2. Validity of Section 138 of the Negotiable Instruments Act, 1881 The petitioners contended that the complaint was not maintainable under Section 138 of the Negotiable Instruments Act, 1881, as the necessary elements required for the constitution of the offence were not present. They argued that for an offence under Section 138, the cheque must be drawn on an account maintained by the drawer, and it must be dishonoured due to insufficiency of funds or because it exceeds the amount arranged to be paid. The petitioners claimed their account had been closed in 2017, and thus, the cheque in question was not drawn on a maintained account. 3. Closure of Bank Account and its Implications The petitioners asserted that they had informed the respondent about the closure of their bank account in 2017 and provided a new account number. Despite this, the respondent presented the cheque for encashment, knowing the account was closed. The petitioners relied on precedents from the Supreme Court and High Court, suggesting that if the complainant was aware that the account was frozen or closed, the complaint regarding the dishonour of the cheque should be dismissed. 4. Admissibility of Evidence and Trial Requirements The respondent argued that the communication about the change of account number was not received, and such matters could only be adjudicated during the trial. The court noted that the purported letter from the petitioners did not mention the closure of the account. Further, a communication from the petitioners dated 15.11.2018 did not indicate the account closure. The court emphasized that the issue of whether the account was closed at the time of cheque issuance required a trial to determine the facts. Conclusion: The court concluded that the matter of the bank account closure and the issuance of the cheque could not be resolved without a trial. It held that there was no infirmity in the impugned order dated 01.05.2019, where the learned MM-04 took cognizance of the offence under Section 138 against petitioner no. 2. The petition CRL.M.C. 4698/2019 and the accompanying application CRL.M.A. 36045/2019 were thus declined. The court clarified that its observations did not amount to an expression on the merits of the case pending before the learned MM-04.
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