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TMI Blog1999 (4) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank, Madras with the remark "account closed". The Appellants have also challenged before the High Court the order dated 10-12-1997 passed by the Metropolitan Magistrate rejecting their application under Section 258 Code of Criminal Procedure for dropping the proceedings. In that application before the Metropolitan Magistrate, the Appellants have stated that before closing the account on behalf of Appellant 1, a letter dated 3-8-1996 was sent by the second accused to the Chief Manager, Canara Bank, Madras informing them to close their group company's accounts; in case, any of the cheques by mistake comes to Canara Bank, Madras, then the same be sent back with the note "account closed - payment stopped". That revision application under Section 482 Code of Criminal Procedure was rejected by the High Court by its judgment and order dated 15-6-1998. Against that order, the present appeal is filed by special leave in which this Court issued notice on 26-3-1999 for final disposal. 2. At the time of hearing of this matter, learned Counsel for the Appellants submitted that the complaint, on the face of it, does not make out any offence punishable under Section 138 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney 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 other provision of this Act, be punished with imprisonment of a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless-- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that it may amount to another offence, it would certainly be an offence under Section 138 as there was insufficient or no fund to honour the cheque in "that account". Further, the cheque is to be drawn by a person for payment of any amount of money due to him "on an account maintained by him" with a banker and only on "that account" the cheque should be drawn. This would be clear by reading the section along with provisos (a), (b) and (c). 7. Secondly, proviso (c) gives an opportunity to the drawer of the cheque to pay the amount within 15 days of the receipt of the notice as contemplated in proviso (b). Further, Section 140 provides that it shall not be a defence in prosecution for an offence under Section 138 that the drawer has no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section. Dishonouring the cheque on the ground that the account is closed is the consequence of the act of the drawer rendering his account to a cipher. Hence, reading Sections 138 and 140 together, it would be clear that dishonour of the cheque by a bank on the ground that the account is closed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make such construction as will suppress the mischief, and advance the remedy, and to suppress all evasions for the continuance of the mischief. To carry out effectively the object of a statute, it must be so construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined: quando aliquid prohibetur, prohibetur et omne pe quod devenitur ad illud. This manner of construction has two aspects. One is that the courts, mindful of the mischief rule, will not be astute to narrow the language of a statute so as to allow persons within its purview to escape its net. The other is that the statute may be applied to the substance rather than the mere form of transactions, thus defeating any shifts and contrivances which parties may have devised in the hope of thereby falling outside the Act. When the courts find an attempt at concealment, they will, in the words of Wilmot, C.J. brush away the cobweb varnish, and shew the transactions in their true light;. 11. This benignant rule originated four hundred years ago in Heydons case which resolved- That for the sure and true interpretation of all statutes in general (be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch it was passed to remedy and then he must supplement the written word so as to give 'force and life' to the intention of the legislature.... A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out? He must then do so as they would have done. A judge must not alter the material of which the Act is woven, but he can and should iron out the creases. (emphasis supplied) 13. Lastly, we would refer to the decision by a three Judge Bench of this Court in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi (1998) 3 SCC 249 dealing with a similar contention and interpreting Section 138 of the Act. In that case, the Court referred to the earlier decisions in the case of Electronics Trade and Technology Devep. Corporation 1996 SCC (Cri.) 454 and K.K. Sidharthan v. T.P. Praveena Chandran (1996) 6 SCC 369 and agreed that the legal proposition enunciated in the aforesaid decisions to the effect that if the cheque is dishonoured because of "stop payment" instruction to the bank, Section 138 would get attracted. It also amounts to dishonour of the cheque within the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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