{"id":258119,"date":"2021-12-04T15:00:33","date_gmt":"2021-12-04T09:30:33","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=258119"},"modified":"2021-12-10T15:49:04","modified_gmt":"2021-12-10T10:19:04","slug":"account-closed-and-cheque-returned","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/12\/04\/account-closed-and-cheque-returned\/","title":{"rendered":"&#8220;Account closed&#8221; and Cheque returned: Is it a reason sufficient for convicting a person under S. 138 NI Act? Read detailed decision of CMM Court, Bangalore"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Court of XX Addl. Chief Metropolitan Magistrate, Bengaluru City: <\/strong>In light of cheque being returned by the bank due to \u201cAccount Closed\u201d Bhola Pandit, XX Addl. C.M.M, convicted an accused under Section 138 of the Negotiable Instruments Act, 1881<\/p>\n<p style=\"text-align: justify;\">The present complaint was filed under Section 200 of the Code of Criminal Procedure read with Sections 138, 142 and 143 of the Negotiable Instruments Act against the accused of dishonour of cheque.<\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Background<\/span><\/h4>\n<p style=\"text-align: justify;\">Accused had availed hand loan of Rs 3,00,000 from the complainant for his family and legal necessities and agreed to repay the same within 3 months. Even after the completion of three months, the accused did not repay the amount and after several demands and requests, accused issued a cheque but the same was returned by the bank due to \u201cAccount Closed\u201d as per banker\u2019s memo.<\/p>\n<p style=\"text-align: justify;\">Thereafter, the complainant got issued a demand notice to the accused and even after that, no repayment has been done by the accused.<\/p>\n<p style=\"text-align: justify;\">Hence, the present complaint was filed within time and had sought to convict the accused by granting compensation under Section 357 of Code of Criminal Procedure double of the cheque amount.<\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Points for Consideration:<\/span><\/h4>\n<ul style=\"text-align: justify;\">\n<li>Does the complainant prove beyond reasonable doubts that, the accused has issued a cheque bearing No.930630 Dated 30.01.2019 for Rs 3,00,000\/- towards the discharge of his lawful liability of the complainant and when the said cheque was presented for encashment, it was returned unpaid due to <em>&#8220;Account Closed&#8221;<\/em> in the account of the drawer as per banker\u2019s memo and inspite of issuance of demand notice, the accused has failed to pay the cheque amount, thereby has committed the offence punishable under Section 138 of NI Act?<\/li>\n<li>What Order or sentence?<\/li>\n<\/ul>\n<h4 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Analysis, Law and Decision<\/span><\/h4>\n<p style=\"text-align: justify;\">The Court opined that the statutory presumptions under Sections 118(a) and 139 of the NI Act shall be drawn in favour of the complainant. Accused neither cross-examined PW 1 nor entered in the witness box to rebut the statutory presumptions drawn in favour of the complainant under Sections 118(a) and 139 of the NI Act.<\/p>\n<blockquote>\n<p style=\"text-align: justify;\"><span style=\"color: #008080;\">There is no rebuttal evidence on behalf of the accused to disprove the case of the complainant.<\/span><\/p>\n<\/blockquote>\n<p style=\"text-align: justify;\">Complainant established his case beyond reasonable doubt since he did not deny the financial capacity of the complainant either at the time of explaining to him the substance of the accusation or at the time of recording his statement under Section 313 of the Code of Criminal Procedure. Accused even admitted receiving the demand notice.<\/p>\n<p style=\"text-align: justify;\">Provisions of Section 139 of NI Act contemplates that, <em>\u2018There shall be a presumption unless the contrary is proved with the holder of a cheque received for the discharge, in whole or in part of any debt or other liability\u2019.<\/em><\/p>\n<p style=\"text-align: justify;\">In the recent judgment, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/x9BnyOg9\">(2021) 5 SCC 283<\/a><strong><em>, <\/em><\/strong><em>Kalamani Tex v. P. Balasubramaniyan<\/em><strong><em>, <\/em><\/strong>the larger bench of the Supreme Court, held that;<\/p>\n<p style=\"text-align: justify;\"><strong><em>\u201c U\/s 118 &amp; 139: Once issuance of cheque and signature admitted, it is required to presume that the cheque was issued as consideration for a legally enforceable debt.\u201d <\/em><\/strong><\/p>\n<p style=\"text-align: justify;\">Hence, Court opined that the accused had borrowed hand loan of Rs 3,00,000 from him towards the discharge of the said loan, the accused had issued the cheque and the said cheque was returned unpaid due to \u201cAccount Closed\u201d in the account of the accused. Therefore, point 1 was answered in affirmative.<\/p>\n<p style=\"text-align: justify;\">In view of the above discussion, complainant proved the guilt of the accused punishable under Section 138 NI Act.<\/p>\n<p style=\"text-align: justify;\">Bench stated that it is worth noting that the offence was in nature of civil wrong, therefore it would be proper to award sentence of fine, instead of awarding a sentence of imprisonment.<\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Direction<\/span><\/h4>\n<p style=\"text-align: justify;\">Court acting under Section 255 (2) of Criminal Procedure Code, convicted accused convicted for the offence punishable under Section 138 of Negotiable Instrument Act and sentenced to pay fine of Rs 3,55,000.<\/p>\n<p style=\"text-align: justify;\"><em>Acting under section 357(1) of code of criminal procedure, it is ordered that an amount of Rs.3,50,000\/-(Rupees Three Lakhs Fifty Thousand only) there from shall be paid to the complainant as a compensation, remaining fine amount of Rs.5,000\/- (Rupees Five Thousand only) is defrayed to the state for the expenses incurred in the prosecution.<\/em><\/p>\n<p style=\"text-align: justify;\">Subject to appeal period the bail bonds stood cancelled. [Purushothama H.C. v. Thotappaji T.S., <a href=\"http:\/\/www.scconline.com\/DocumentLink\/e2nb9y7p\">CC No. 6117 of 2019<\/a>, decided on 2-12-2021]<\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><strong>Advocates before the Court:<\/strong><\/p>\n<p style=\"text-align: justify;\">By Sri. B.J. Krishna \u2013 Advocate<\/p>\n<p style=\"text-align: justify;\">By Sri. Munishamanna. U \u2013 Advocate<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Court of XX Addl. Chief Metropolitan Magistrate, Bengaluru City: In light of cheque being returned by the bank due to \u201cAccount Closed\u201d <\/p>\n","protected":false},"author":8808,"featured_media":248968,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,4721],"tags":[47958,31402,2862,29785,42834,47957,23584,33580,47956],"class_list":["post-258119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-district-court","tag-account-closed","tag-demand-notice","tag-dishonour_of_cheque","tag-law","tag-legal-news","tag-section-118a-ni-act","tag-section-138-ni-act","tag-section-139-ni-act","tag-statutory-liability"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>&quot;Account closed&quot; and Cheque returned: Is it a reason sufficient for convicting a person under S. 138 NI Act? 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CMM Court considers","author":"Bhumika Indulia","date":"December 6, 2021","format":false,"excerpt":"Court of XX Addl. Chief Metropolitan Magistrate, Bengaluru City: Bhola Pandit, XX Addl. CMM, convicted a person who presented a cheque to repay a loan but the same was dishonored due to insufficient funds. Instant complaint was filed under Section 200 of Code of Criminal procedure against the accused of\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":266804,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/05\/13\/law-on-liability-of-guarantor-dishonour-of-cheque-section-138-ni-act\/","url_meta":{"origin":258119,"position":1},"title":"Liability of Guarantor for Cheque Dishonour: Can lender enforce his right against either principal borrower or his guarantor? Dwarka Courts answers","author":"Bhumika Indulia","date":"May 13, 2022","format":false,"excerpt":"Dwarka Courts, Delhi: Rahul Jain, Metropolitan Magistrate, while addressing a matter regarding dishonour of cheque, held that mere assertion of non-receipt of legal notice cannot help the accused in escaping liability under Section 138 Negotiable Instruments Act, 1881. It was alleged in complaint that accused had approached the complainant to\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":255796,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/18\/dishonour-of-cheque-3\/","url_meta":{"origin":258119,"position":2},"title":"Mere denial is useless, Presumption under S. 138 NI Act can be rebutted only by leading cogent evidence: Court holds accused guilty where &#8220;payment stopped by drawer&#8221;","author":"Bhumika Indulia","date":"October 18, 2021","format":false,"excerpt":"Saket Courts, New Delhi: Swati Gupta, Metropolitan Magistrate reiterated what is expected of an accused to rebut the statutory presumption against him in cases of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881. Brief facts Complainant and accused had entered into an agreement to sell the property\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Saket Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":261806,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/02\/16\/dishonour-of-cheque-8\/","url_meta":{"origin":258119,"position":3},"title":"Can only a sole proprietor be held liable under S. 138 NI Act for dishonour of cheque drawn on account of sole proprietorship concern? Tis Hazari Court decodes","author":"Bhumika Indulia","date":"February 16, 2022","format":false,"excerpt":"Tis Hazari Courts, New Delhi: While deciding a matter under Section 138 of the negotiable Instruments Act, 1881, Devanshu Sajlan, MM-05 (NI Act) reiterated the settled position of law that there is no concept of vicarious liability in case of a sole proprietorship concern since a sole proprietorship concern does\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Tis-hazari","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2018\/08\/Tis-hazari.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":255614,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/14\/law-on-dishonour-of-cheque\/","url_meta":{"origin":258119,"position":4},"title":"Law on Dishonour of Cheque | Loan given in cash, no documentary evidence available. Lender files a complaint under S. 138 NI Act: Read how \u2018presumption\u2019 under S. 118 (a) plays a role","author":"Bhumika Indulia","date":"October 14, 2021","format":false,"excerpt":"Patiala House Courts, New Delhi: Prayank Nayak, MM-01 acquitted the accused of offence under Section 138 (dishonour of cheque) of the Negotiable Instruments Act, 1885, holding that the accused successfully dislodged the statutory presumption. In the present matter, complaint was filed under Section 138 of the Negotiable Instruments Act, 1881\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Patiala House Courts, Delhi","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/patialacourt.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/patialacourt.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/patialacourt.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/patialacourt.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/03\/patialacourt.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":220813,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/10\/14\/del-hc-closure-of-bank-account-of-accused-prior-to-issuing-of-cheque-is-a-matter-for-trial-taking-of-cognizance-under-s-138-ni-act-sustained\/","url_meta":{"origin":258119,"position":5},"title":"Del HC | Closure of bank account of accused prior to issuing of cheque is a matter for trial; taking of cognizance under S. 138 NI Act sustained","author":"Bhumika Indulia","date":"October 14, 2019","format":false,"excerpt":"Delhi High Court:\u00a0Anu Malhotra, J. dismissed a petition filed against the order of the trial court whereby the petitioner was summoned on cognizance having taken of the alleged commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (dishonour of cheque). Rizwan, Advocate appearing for the petitioner,\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/258119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=258119"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/258119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/248968"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=258119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=258119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=258119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}