HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL PETITION No.4943 OF 2008 DATED.29-09-2011 ORDER: This Criminal Petition is filed by the Petitioner/Accused (For short, ‘The Accused’) under Section 482 of Cr.P.C. seeking to quash proceedings in Calender Case No.250 of 2008, pending on the file of the Court of Judicial Magistrate of First Class, Jagityal, Karimnagar District. 2. Whereas the Petitioner is the Accused, the Respondent No.1 is the Complainant in the Calender Case. For the sake of convenience, I refer the parties as arrayed in the Calender Case. 3. The complaint was filed on the ground that the Accused issued three cheques bearing Nos.995510 for Rs.2,50,000/-, 995511 for Rs.2,50,000/- and 995512 for Rs.2,00,000/-, dated 27-09-2007 respectively, drawn on Andhra Bank, Malakpet Branch, Hyderabad towards full payment of the material supplied to him by the Complainant. The Complainant on 23-01-2008 presented the three cheques before his banker i.e. Gayathri Bank, Jagityal but, they were returned on the ground that the corresponding account of the accused was closed vide letter dated 28-01-2008 of Andhra Bank, Malakpet Branch addressed to HDFC Bank Limited, Lakdikapool, Hyderabad and in turn addressed to the bank of the Complainant and further when the Complainant approached the accused, the later gave necessary assurance, following which, the Complainant presented the three cheques again on 22-02-2008 before the same bank of the Accused but again the cheques were returned vide memo dated 07-03-2008 with the same endorsement ‘Account closed’ and further the Complainant got issued a legal notice through his counsel dated 11- 03-2008 demanding to pay the amount of Rs.7,00,000/- covered by the three cheques within 15 days there from, for which, the Accused gave a reply through his counsel on 27-03-2008 denying the allegations and his liability to pay the amounts. 4. It is the main contention of the learned counsel for the Accused that by virtue of Section 138 of the N.I. Act the corresponding notice should have been given to the accused within 15 days of receiving the information about the dishonour of the cheques and the complaint should have been filed within 30 days of the expiry of that 15 days and further by the date of filing the complaint that period had been expired and it is also further contended by him that Section 138 read with Section 142 of the N.I. Act would be applicable only subject to the Accused having account in the said bank and not otherwise and in fact his account was closed in 2005 i.e. long before itself to do so. Further, relying upon a decision of the Kerala High Court reported in Joseph V. Philip Joseph[1] he seeks to quash the proceedings on those grounds. 5. On the other hand, it is the contention of learned counsel for the complainant that the cheques could be presented before the concerned Bank any number of times during the period of its validity until giving the corresponding notice, whereas the complaint has to be filed within one month from the date immediately following the day on which the period of 15 days from the date of receipt of the notice by the accused expired and in fact, the complaint was filed duly complying with those conditions. It is also contended by him that even though the accused was not having any account when the cheques were returned with the endorsement to the effect that he got no account, it is to be deemed that the cheques returned unpaid on the ground that the amount of money standing to the credit of that account was insufficient to honour the cheques and therefore the contention of the learned counsel for the accused is not tenable. In support of his contentions he has relied upon decisions in 1) Prem Chand Vijay Kumar – Appellant Vs. Yashpal Singh and another – Respondent[2], 2) B. Rama Chandra Reddy Vs. Abid Ali and another[3], and 3) NEPC Micon Limited and others V. Magma Leasing Limited[4]. 6. In reply, it is contended by the learned counsel for the Accused in a decision of the Supreme Court in NEPC Micon Limited and others V. Magma Leasing Limited, cited 4th supra, it is observed by the Supreme Court that when a cheque is returned by a Bank unpaid on the ground that the account is closed it would mean that the amount of money standing to the credit of that account is insufficient to honour the cheque taking into consideration the fact that when the cheque was presented, the account was in force, but later it was closed which was clearly clarified in a decision reported in Kumaresan Vs. Ameerappa[5] and hence the same analogy is not applicable here. 7. The point for consideration is whether there are sufficient grounds to quash the proceedings against the Accused? 8. Section 138 of the N.I. Act reads : “Dishonour of cheque for insufficiency, etc., of funds in the account : Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless : (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation :_ For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.” 9. Section 142 of the Act reads : “Cognizance of offences : Notwithstanding anything contained in the Code of Criminal Procedure, 1973 : (a) no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138; (c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138.” 10. I n Prem Chand Vijay Kumar Vs. Yashpal Singh and another, cited 2nd supra, it is observed by the Supreme Court with reference to relevant circumstances that the dishonour of cheque on each presentation gives a fresh right to present it again during its period of validity but it does not give a fresh cause of action to do so after giving relevant notice and complaint has to be filed within one month from the date immediately following the day on which the period of 15 days from the date of receipt of the corresponding notice by the drawer expires. Further, similar observation was made under similar circumstances in B. Ramachandra Reddy V. Abid Ali and another cited 3rd supra. 11. Further, in the decision cited 3rd supra the relevant facts of which are that a cheque was presented before a Bank for presentation and it was returned unpaid with endorsement “Account is closed” whereas in fact by the date of issuing the cheque the account was not closed and under those circumstances it is observed : “7. Further, the offence will be complete only when the conditions in the provisos (a), (b) and (c) are complied with. Hence, the question is, in a case where cheque is returned by the bank unpaid on the ground that the ‘account is closed’, would it mean that cheque is returned as unpaid on the ground that ‘the amount of money standing to the credit of that account is insufficient to honour the cheuqe’. In our view, the answer would obviously be in the affirmative because cheque is dishonoured as the amount of money standing to the credit of ‘that account’ was ‘nil’ at the relevant time apart from it being closed. 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. The expression “the amount of money standing to the credit of that account is insufficient to honour the cheque” is a genus of which the expression “That account being closed” is specie. After issuing the cheque drawn on an account maintained, a person, if he closes ‘that account’ apart from the fact that it may amount to another offence, it would certainly be an offence under section 138 as there was insufficient or no fund to honour the cheque in ‘that account’ : Further, cheque is to be drawn by a person for payment of any amount of money due to him on an account maintained by him with a banker and only on “that account” cheque should be drawn. This would be clear by reading the Section along with provisos (a), (b) and (c).” 12. But in DCR (2001) 223, cited 1st supra, a similar question arose on the ground that a cheque issued by the Accused therein was returned with an endorsement “Account closed” but before issuing the cheque itself the account was closed. It is observed that the decision 3rd cited supra is not applicable to the facts and circumstances of the case because by the time the cheque was issued the account of the accused was not in force. So, according to the Kerala High Court, it would be only when the account was in force, it could be deemed that the cheque was dishonoured because of insufficiency of funds. 13. It is pertinent to note here that the observation of the Supreme Court is only with reference to the issuance of the cheque concerned therein when the account of the accused was in force in his bank but closed before it could be encashed. Further, it is also emphatical that Section 138 of the N.I. Act postulates that such a contingency would only arise when such account is in force. In fact, the Kerala High Court rightly clarified the situation taking into consideration the observations made by the Supreme Court. 14. Therefore, when long prior to the issuance of the cheque in question itself the account was closed, the observations made in the decision 2nd cited supra cannot be applicable here and consequently it is to be held that the Calender case is not tenable. For the foregoing reasons discussed above, the Criminal Petition is allowed quashing the entire proceedings in Calender Case No.250 of 2008, pending on the file of the Court of Judicial Magistrate of First Class, Jagityal, Karimnagar District. __________________________ G. KRISHNA MOHAN REDDY, J Dated:29-09-2011. Dsh. THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CRIMINAL PETITION No.4943 OF 2008 September, , 2011 DSH [1] DCR (2001) 223 [2] (2005) 4 SCC 417 [3] 2007 Crl.L.J. 641 [4] AIR 1999 SC 1952 [5] 1992 (1) KLJ 25