1 Cri-A-1883-07.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION Mhi CRIMINAL APPLICATION NO. 1883 OF 2007 IN CRIMINAL APPEAL NO. OF 2007 Ashish Parikh ) Proprietor of Parikh Investments ) having his office at Commissariat ) Bldg. 4th floor, 231, D.N.Road, ) Mumbai 01. ).. Appellant (Org. complainant) vs. 1. State of Maharashtra ) 2. Ashit Vinod Shah ) Jamnabai Building, Oomer Park) Bhulabhai Desai Road, ) Mumbai 400 026. ).. Respondents (orig. accused) Ms. Poonam Tahaliyani, Advocate, for the appellant Ms. U.V.Kejriwal, APP, for the respondent No.1 - State. Mr. P.D.Desai, Advocate, for the respondent No.2. CORAM: J.H.BHATIA,J. DATE : 22nd March, 2011. JUDGMENT : 1. Heard the learned Counsel for the applicant. 2. The appellant, by this application seeks leave to prefer appeal against 2 Cri-A-1883-07.sxw the order of acquittal for the offence under Sec. 438 of Negotiable Instruments Act in Case No.538/SS/05 passed by the learned Special Metropolitan Magistrate, Mumbai. According to the complainant, the accused/respondent had issued two cheques of Rs.9 lakh each towards part-payment of his outstanding dues on account of the purchases made by him On 25.4.2005, both cheques were deposited by the appellant and the drawee Bank returned the cheque unpaid with endorsement "attachment received from Crime Branch". Inspite of service the statutory notice making demand, the accused failed to make payment within the statutory period. The trial Court acquitted the accused holding that there is no evidence on record to show that the cheque was dishonoured for want of sufficient funds or sufficient arrangement made with the Bank. 3. The learned Counsel for the appellant concedes that there is no evidence on record to show that sufficient funds were not available in the account of the accused when the cheques were returned dishonoured. According to her, presuming that sufficient funds were there and still the cheques were dishonoured because of the attachment of the said account by the Crime Branch, the accused should have made the payment, when the statutory notice was served on him. As he failed to make payment within the stipulated period after service of statutory notice, he is liable to be held guilty under Sec. 138 of Negotiable Instruments Act. 3 Cri-A-1883-07.sxw 4. To make out the offence under Sec. 138 of Negotiable Instruments Act, following ingredients are necessary :- (i) the cheque must have been drawn by a person on his account maintained with the bank for payment of amount of money to another person; (ii) the said cheque should have been issued for discharge in whole or in part of his debt or other liability; (iii) the cheque must have been returned unpaid by the drawee bank either because amount of money standing to the credit of the account is insufficient to honour the cheque or it exceeds amount arranged to be paid from that account by an agreement made with that bank. 5. If these conditions are satisfied, next comes the issuance of notice within 30 days demanding payment and then failure of the drawer of the cheque to make payment within 15 days from the service of the notice. From the language of Sec. 138, it is clear that only if the cheque is dishonoured for want of sufficient funds sufficient arrangement made for payment, the offence under Sec. 4 Cri-A-1883-07.sxw 138 could be committed, subject to other conditions being satisfied. If there were sufficient funds in the account against which the cheque was drawn and if the cheque is dishonoured for any other reasons, the drawer of the cheque cannot be held responsible under Sec. 138. 6. It is settled position that if the accused has either closed the account or has issued stop payment notice, still it is held that the case falls under Sec. 138 because by this act of closing the account or by giving stop payment notice, he snaps the arrangement made for the payment. The learned Counsel for the appellant in support of the contention relied upon NEPC Micon Ltd. & Ors. vs. Magma Leasing Ltd. AIR 1999 SC 1952. In that case, the account was closed by the drawer before the cheque was presented and therefore the Supreme Court held that it would amount to the cheque being returned unpaid for want of sufficient funds. In the present case, no evidence is produced to show that in the account of the accused sufficient funds were not available to clear the cheques nor there is any evidence that the accused had closed the account or that he had given any stop payment notice and because of his own act, the cheque could not be cleared. In the present case, the Crime Branch, which is an authority under the State, had issued directions to the Bank. Because of that order, the Bank refused to clear the cheque and returned it unpaid. The order of attachment of the account was not 5 Cri-A-1883-07.sxw passed at the behest of the accused nor he was competent to pass any such order. As he had no control over the Crime branch he could not stop the Crime Branch from passing any such order. If because of such attachment order passed by the Crime Branch, the account was attached and the cheques could not be cleared, it cannot be said that the cheques were returned unpaid for want of sufficient funds or sufficient arrangement. This very important ingredient of the offence under Sec. 138 is missing and therefore the Metropolitan Magistrate was justified in passing the order of acquittal. 7. In view of the above circumstances, I find no justification to grant leave to prefer appeal against the order of acquittal. Therefore, the Application stands rejected. (J.H.BHATIA,J.)