Case Note & Summary
The applicant, M/s. V. A. Enterprises, through its proprietor Ashok Pundalik Suryavanshi, filed a criminal application seeking leave to appeal against the judgment and order dated 30.11.2011 passed by the 4th Judicial Magistrate, First Class, Pimpri, Pune, which acquitted the respondents (M/s. Tooltek Special Machines and its proprietor Bashir Hamidkhan Inamdar) of the offence under Section 138 of the Negotiable Instruments Act, 1881. The applicant had filed a complaint alleging that a cheque issued by the respondents for Rs. 1,00,000 was dishonoured with the remark 'account closed'. The trial court acquitted the accused on the ground that the cheque was presented beyond its validity period of six months. The applicant contended that the trial court erred in acquitting the accused as the defence of validity period was not raised by the accused at trial, and the dishonour due to 'account closed' constitutes an offence under Section 138. The court analysed the provisions of Section 138 and the evidence on record. It held that the dishonour of a cheque on the ground of 'account closed' is an offence under Section 138, as it indicates the drawer's deliberate act to avoid payment. The court further held that the complainant is not required to prove that the cheque was presented within the validity period if the accused does not raise such a defence. Since the accused did not raise the issue of validity period at trial, the acquittal on that ground was perverse. The court allowed the application for leave to appeal, set aside the impugned judgment, and remanded the matter for fresh consideration on merits.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Account Closed - The dishonour of a cheque on the ground that the account is closed constitutes an offence under Section 138 of the Negotiable Instruments Act, 1881, as it amounts to non-payment of the amount. The court held that the closure of the account is a deliberate act of the drawer and cannot be equated with insufficiency of funds alone, but still falls within the ambit of Section 138. (Paras 5-6) B) Negotiable Instruments Act - Dishonour of Cheque - Validity Period - Section 138 - The complainant is not required to prove that the cheque was presented within its validity period if the accused does not raise such a defence at the trial. The court held that the burden is on the accused to show that the cheque was presented beyond the validity period, and in the absence of such plea, the acquittal on that ground is unsustainable. (Paras 7-8) C) Criminal Procedure Code - Leave to Appeal - Section 378(4) - The complainant can seek leave to appeal against an order of acquittal in a complaint case under Section 378(4) of the Code of Criminal Procedure, 1973. The court allowed the application for leave to appeal, finding that the impugned judgment suffered from perversity and required interference. (Paras 1, 9)
Issue of Consideration
Whether the acquittal of the accused for offence under Section 138 of the Negotiable Instruments Act, 1881, on the ground that the cheque was not presented within its validity period, is sustainable when the accused did not raise such defence at trial and the cheque was dishonoured due to 'account closed'.
Final Decision
The court allowed the application for leave to appeal, set aside the impugned judgment and order of acquittal dated 30.11.2011, and remanded the matter to the trial court for fresh consideration on merits in accordance with law.
Law Points
- Dishonour of cheque on ground of 'account closed' constitutes an offence under Section 138 of the Negotiable Instruments Act
- 1881
- Complainant need not prove cheque presented within validity period if accused fails to raise issue at trial
- Acquittal can be challenged by complainant under Section 378(4) CrPC with leave of court
