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Anurag (Assoicate)     06 September 2009

Account Blocked/Freezed can be prosecuted under 138 NI Act.

Hi,

 Can you tell me whether Account Blocked / Freezed comes under section 138 N.I.Act or not.  I have to file one complaint in which reason for cheque bounce is Account Freezed.  If anyone have any Judgment in support of it kindly provide me the same.  Please email me at anurag4jain@gmail.com

 

Regards

Anurag Jain



Learning

 32 Replies

Sachin Bhatia (Advocate)     06 September 2009

Yes, section 138 of N. I. Act will be applicable. But before filing a complaint  send notice stating facts and demanding the amount from him within 15 days from the date of receipt of your notice. If he fails to make the payment  in 15 days than file the complaint within one month from the date of receipt of the demand notice by him.

1 Like

Shree. ( Advocate.)     06 September 2009

Dear Anurag,

Go through the below citations:

ACCOUNT CLOSED:DISHONOUR OF CHEQUE CITATIONS:
 
o      Section 138 - Account closed - Dishonour of cheque - Offence will be committed only if account is closed after issuance of cheque and not when cheque is issued after closure of account. (Urban Co- op. Credit Society Vs State of Gujarat) 2004(1) CRIMINAL COURT CASES 527 (Gujarat)
 
o      Section 138 - Account closed before issuance of cheque (In the instant case account was closed in 1987 whereas cheque from that account was issued in 1990) - Cheque dishonoured - No offence u/s 138 of Negotiable Instruments Act is made out - Offence would come within purview of Section 420 IPC. (Joseph Vs Philip Joseph) 2001(1) CIVIL COURT CASES 220 (Kerala)
 
o      Section 138 - Account not in existence by the date on which the cheque was issued - Cheque dishonoured - No case is made out against the accused for the offence u/s 138 of the Act. (Deepa Finance Corpn. Vs A.K.Mohammed) 2001(3) CIVIL COURT CASES 382 (Kant.) : 2002 (1) ISJ (BANKING) 0087
 
o      Section 138 - Cheque issued after closure of account - Cheque dishonoured - Such a cheque falls within the sweep of Section 138 of the Act. (Salim Vs Thomas) 2004(2) CIVIL COURT CASES 620 (Kerala)
 
o      Section 138 - Closure of account - Offence u/s 138 of the Act is made out - Closure of account strengthens the intention of accused to cheat - Whether account was closed with dishonest intention or otherwise can be looked into at trial stage. (Rajendra Vasantrao Khode Vs Laxmikant Shantilal Choudhari) 2000(3) CIVIL COURT CASES 524 (Bom.) : 2000 ISJ (BANKING) 0461
 
o      Section 138 - 'Account closed' - Cheque returned with this endorsement - Amounts to dishonesty as such comes within the definition of the provision. (Thirumala Agencies & Anr. Vs Samala Mareppa & Sons) 2001(3) CIVIL COURT CASES 423 (Kant.) : 2001 ISJ (BANKING) 0403
 
o      Section 138 - 'Account closed' - Closure of account on a date antecedent to the date of cheque - it is open to the party to show that the cheque was drawn on date antecedent to the date which the cheque bears.(Japhari Vs Priya) 1993 CIVIL COURT CASES 563 (Kerala) : 1993 ISJ (BANKING) 0557 : 1994 (1) BANKING CASES 0642 : 1994 (1) BCLR 0294 : 1999 (96) COMP. CASES 0818 : 1994 (1) CRIMES 0379 : 1993 (2) KLT 0141
 
·       Section 138 - 'Account closed' - Dishonour of cheque - It is an offence u/s 138 of the Act - Closure of the account would be an eventuality after the entire amount in the account is withdrawn - It means that there was no amount in the credit of "that account" on the relevant date when the cheque was presented for honouring the same. (NEPC Micon Ltd. Vs Magma Leasing Ltd.) 1999(2) CIVIL COURT CASES 471 (S.C.) : 1999(1) APEX COURT JOURNAL 624 (S.C.) : 1999 ISJ (BANKING) 0433 : 1999 (1) ALL INDIA CRIMINAL LR (CALCUTTA) 0147 : 1999 (2) MPLJ 0024 : 1999 (2) CTC 0347
 
·       Section 138 - 'Account closed' - Offence is made out - Not necessary that bank account should be alive at the time of presentation of cheque. (NEPC Micon Ltd. Vs Magma Leasing Ltd.) 1999(2) CIVIL COURT CASES 459 (Calcutta) : 1999 (2) ALL INDIA CRIMINAL LR (S.C.) 0218 : 1999 (1) BANKING CASES 0269 : 1999 (96) COMP. CASES 0822 : 1998 (2) CLT 0505
 
o      Section 138 - 'Account closed' - Once the cheque is issued, law takes care to see that it is honoured, failing which an erring drawer will be penalised - For constituting the offence dishonour of cheque is material and it can very well be on closure of account also.(Shivendra Sansguiri Vs Adineo) 1997(1) CIVIL COURT CASES 348 (Bombay) : 1996 (2) BANKING CASES 0569 : 1996 CRL. L.J. 1816 : 1996 (4) CCR 0429 : 1998 ALLMR 0880
 
o      Section 138 - 'Account closed' - Prosecution can be launched. (J.Veeraraghavan Vs Lalith Kumar) 1995(2) CIVIL COURT CASES 206 (Madras) : 1995 (1) BANKING CASES 0318 : 1995 (2) BCLR 0428 : 1996 BJ 0191 : 1995 (3) CRIMES 0205 : 1995 CRL. L.J. 1882 : 1994 (2) LW (CRL.) 0663
 
o      Section 138 - 'Closure of account' - Attracts penal liability irrespective of whether closure of account by drawer was prior or subsequent to issue of cheque - Ground on which cheque was dishonoured is not material. (S.R.Muralidar Vs Ashok G.Y.) 2001(3) CIVIL COURT CASES 155 (Kant.) : 2002 (1) ISJ (BANKING) 0402
 
o      Section 138 - 'Closure of account' - Dishonour of cheque on account of closure of account before or after issuing a cheque - It means insufficiency of funds - Offence u/s 138 is committed. (G.Venkataramanaiah Vs Sillakollu Venkateswarlu & Anr.) 1999(1) CIVIL COURT CASES 674 (A.P.) : 1999 (2) ALL INDIA CRIMINAL LR (A.P.) 0156 : 1999 (97) COMP. CASES 0013
 
o      Section 138 - Cheque issued after closure of account - Cheque dishonoured - Offence stands committed even if cheque is issued after closure of account because amount of money standing to credit of "that account" would be "nil" at the relevant time apart from it being closed. (Hashmikant M.Sheth Vs State of Gujarat) 2004(4) CRIMINAL COURT CASES 553 (Gujarat)
 
o      Section 138 - Cheque issued after closure of account - Cheque dishonoured - Such a cheque falls within the sweep of Section 138 of the Act. (Salim Vs Thomas) 2004(2) CIVIL COURT CASES 620 (Kerala) = 2004(3) CRIMINAL COURT CASES 439 (Kerala)
 
·       Section 138 - Cheque issued when account had already been closed - Provision of Section 138 will apply. (N.A.Issac Vs Jeemon P.Abraham & Anr.) 2005(1) CIVIL COURT CASES 690 (S.C.) : 2005(1) CRIMINAL COURT CASES 119 (S.C.)
o      Section 138 - Cheque returned as "Account closed" - No offence is made out. (Prasanna Vs Vijaylakshmi) 1993 CIVIL COURT CASES 56 (Madras) : 1992 ISJ (BANKING) 0436
o      Section 138 - Cheque returned with the endorsement 'Account closed' - Amounts to an offence under section 138 of the Act. (Japahari Vs Priya) 1993 CIVIL COURT CASES 563 (Kerala) : 1993 ISJ (BANKING) 0557 : 1994 (1) BANKING CASES 0642 : 1994 (1) BCLR 0294 : 1999 (96) COMP. CASES 0818 : 1994 (1) CRIMES 0379 : 1993 (2) KLT 0141
o      Section 138 - Dishonour of cheque - 'Account closed' - Closure of account is not a bar on Magistrate to take cognizance of complaint u/s 138 of the Acct. (M/s G.M.Mittal Stainless Steels Ltd. Vs M/s Nagarjuna Investment Trust Ltd.) 1996(1) CIVIL COURT CASES 87 (A.P.) : 1995 (2) ALL INDIA CRIMINAL LR (A.P.) 0737 : 1996 BJ 0253 : 1995 (4) CRIMES 0379 : 1995 (2) ALT (CRL.) 0410
o      Section 138 - Dishonour of cheque - Closure of account - Does not constitute offence under Section 138 of the Act. (Malikarjun Traders, Sindhanur Vs B.Pandurang Setty & Anr.) 1996(1) CIVIL COURT CASES 617(1)(Kant.) : 1996 ISJ (BANKING) 0456 : 1996 (1) KARLJ 0522
 

saurav (private practice)     06 September 2009

 can u please give me judgements on issuance of two notices on one cheque

Kamal Grover (Advocate High Court Chandigarh M:09814110005 email:adv.kamal.grover@gmail.com)     07 September 2009

Mr.Shree has guide you rightly.

But Mr.Saurav you cannot send two notices and in future you have to rely on one only. It is not mere a letter but a Notice through officer of the court (Advocate).

Regards

adv.kamal.grover@gmail.com

PJANARDHANA REDDY (ADVOCATE & DIRECTOR)     07 September 2009

DEAR ANURAG,

when ever u have legally enforceble debt obligation from ur claint under 138 NI ACT,the case can be made and certainly you can win , the technical interpretations are quite common but depends on the grounds of arguements, however shree  has given most available citations....regards.PJANARDHANA REDDY 99851 33699 ponaka2008@gmail.com

Anurag (Assoicate)     08 September 2009

Actually Account Blocked / Freezed means blocked or freezed by the order of the Court.  I want to know in such case, 138 is applicable or not.  Is yes, then any Judgement in support of it. 

Anurag (Assoicate)     09 September 2009

I am still awiting for comments from my learned friends

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108)     16 September 2009

1.  If the  Account is Blocked or Freezed by the orders of the Court,  THEN no legal action whatsoever, can be proceeded against.

2.  The Court becomes the culprit in such cases and the Court cannot be prosecuted.

3.  The Drawer has no control or say "intention" to get the cheque dishonoured by his bank, when the account is under judicial compulsion / intervention.

Hence no action u/s 138 or for that matter under any law can lie, when there is Freeze order by the court of law.

Keep Smiling .... Hemant

 

 

 

Account Blocked / Freezed means blocked or freezed by the order of the Court.

adv. rajeev ( rajoo ) (practicing advocate)     18 September 2009

Frnd,

I agree with Hemant Agarwal.  Account blocked is not an account closed. It does not attract NI Act.

Adinath@Avinash Patil (advocate)     10 October 2009

ACCOUNT BLOCKED/ FREEZED ARE NOT COME UNDER SEC.138 OF N.I. ACT. BUT YOU CAN FILE COMPLAINT U/C 420 OF I.P.C.

 

Adinath@Avinash Patil (advocate)     10 October 2009

SHREE,

ALL RULINGS ARE SUBMITTED ARE ON ACCOUNT CLOSED, VERY GOOD ,

I APPRECIATE RULINGS,

 HERE THE CASE IS OF ACCOUNT BLOCKED/FREEZED.

ACCOUNT CLOSED & ACCOUNT BLOCKED/FREEZED ARE DIFFRENT.

Divyakant (-)     10 October 2009

any Current rulings on Account closed are available

 

Divyakant (-)     10 October 2009

any current Rulings of Supreme Court on Account closed are available in favour of accoused are available with any one...

 

shailendra patadia (director)     01 July 2012

here i have attached bombay  high court judgment  on account sealed by crime branch and in such event if a cheque gets dishnoured then it is for reasons beyond control of the accused so he cannot be punished  under section 138 of the negotiable instrument act and there is one more judjment of supreme court in the case of rajkumar khurana where in the supreme court has held the 138 negotiable instrument act is attracted only in cases where cheque is returned only for inssufficiant funds and for no other reasons of return of the cheque will attract  the negotiable instrument act


Attached File : 32819364 138 cheque returned for resons beyond control account sealed by crime branch no offance un 138 j.h.bhatia mumbai high court.pdf downloaded: 296 times

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