Case Note & Summary
The High Court of Bombay heard three consolidated criminal applications challenging the dismissal of revision applications against issuance of process for offences under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The applicants contended that the cheques were invalid as they were drawn on State Bank of Patiala, which had amalgamated with State Bank of India on 1st April, 2017, while the cheques were presented for encashment on 17th March, 2021. The Court examined the complaint allegations- Denial to quash the complaints
Headnote
Criminal Law-- Code of criminal Procedure, 1973-- Section 482 -- Negotiable Instruments Act, 1881- Sections 138 and 141 -- Dishonour of cheques-- Complaints u/s 138 and 141 of NI Act-- Issuance of process to applicants/accused-- Challenged to the order of issuance of process before session court-- Dismissal of revisions by session court-- Aggrieved-- Challenged by applicants/accused u/s 482 of CRPC-- Advancement of loan by complainant-- Cheques were drawn in favour of firm-- Dishonour of cheques with endorsement of "Insufficient funds''- Subject cheques became invalid due to amalgamation and merger of bank-- Satisfaction of condition of Section 138 of NI Act as cheques were presented within stipulated time period -- Valid presentation of cheques-- Expression "within the period of its validity"-- Cases referred-- Object of section 138 of NI Act discussed-- Invalidation of cheque on account of merger with another bank-- Question as to whether the drawee bank could have honoured the cheque as it was rendered invalid, would warrant adjudication at the time of trial-- High court declined to quash the complaints-- Applications dismissed Para-- 19, 20, 21, 26, 35, 36, 38, 40, 41
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Issue of Consideration: The Issue of Consideration was whether the cheques in question were valid instruments on the date of presentation for encashment as required under clause (a) of proviso to Section 138 of the Negotiable Instruments Act, 1881
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Final Decision
The High Court allowed the applications and quashed the criminal proceedings against the applicants, holding that the cheques were invalid instruments as they were drawn on a bank that did not exist on the date of presentation, and no offence under Section 138 of Negotiable Instruments Act, 1881 was made out prima facie
