Accused walks free in cheque bounce case

Chandigarh, April 8

Pratima Singla, Judicial Magistrate (First Class) has acquitted Sant Pal Singh of Johal village, Jalandhar, in a cheque bounce case filed by a private bank.

A representative of the Kotak Mahindra Bank had filed a complaint against Sant Pal under Sections 138 of the Negotiable Instruments Act.

He said the accused had approached the bank for grant of various credit facilities. After considering his request, the bank had sanctioned Kisan Credit Card loan to the accused.

The loan was repayable as per the agreed terms and conditions of the agreement but the borrower defaulted on repaying the credit granted to him. On August 17, 2017, the accused issued a cheque for Rs 1,33,60,480 drawn on Axis Bank Ltd, Kanganwal, Jalandhar, which was payable at all branches at par, with an assurance that the it shall be encashed on its presentation. But when the cheque was presented for encashment at Kotak Mahindra Bank Ltd, Sector 9-C, Chandigarh, it was returned dishonoured with remarks: “Cheque requires counter signature” vide memo dated August 23, 2017.

On the other hand, the counsel for the accused, Ashish Kumar Gupta and Supreme Bachhal, denied the charges and claimed that the bank had misused the cheque given to ING Vysya Bank as security in 2013. They argued that the ING Vysya Bank Ltd. was merged with Kotak Mahindra Bank Ltd on March 31, 2015. The counsel claimed that the cheque was issued in favour of ING Vysya Bank on August 17, 2017, whereas the complainant admitted in his cross-examination that the ING Vysya Bank was not an existent entity at the time of presentation of the cheque.

After hearing of the arguments, the court observed that in the present case, the cheque was dishonoured on account of “pay order/cheque requires counter signatures” and not for the reason of insufficiency of funds or exceeding the arrangement. Not only the cases regarding dishonour of cheques on account of insufficiency of funds or on account of exceeding of arrangement, but also the cases involving dishonour of cheques on accounts of “stop payment” and “account closed” have been brought within the ambit of offence under the provision of the Negotiable Instruments Act.

But where the cheque drawn by the accused is not honoured by the bank on account of “pay order/cheque requires counter signature”, dishonouring of the cheque for the aforesaid reason would not constitute an offence under Section 138 of the act. Besides, the cheque is not valid as it has been issued in the name of a non-existing company, therefore, offence under Section 138 of the Negotiable Instruments Act is not attracted.