High Court stays cheque-bounce case
A man has moved the Punjab and Haryana High Court claiming that he was being proceeded against in a cheque-bounce case in the “name of a dead person”. The petitioner claimed that the alleged recipient expired on September 10, 2022, while the cheque was dated April 15, 2023.
Taking up the matter, Justice Mahabir Singh Sindhu stayed the proceedings before a Dera Bassi court.
The proceedings under Negotiable Instruments Act are initiated after the receiver is informed by the bank that the cheque issued in his name has been dishonored. He then sends a legal notice to the drawer or the person issuing the cheque, giving him a stipulated time to make payment. The receiver or the payee initiates legal action against the drawer if the payment is still not made. Typically, this process is governed by Section 138 of the Negotiable Instruments Act.
The petitioner or the drawer challenged the validity of the cheque, arguing that it could not be considered a valid negotiable instrument since the receiver had already passed away months earlier. Appearing on his behalf before Justice Sindhu’s Bench, advocates Pankaj Chandgothia and Mahi Sindhu contended that the bank should have rejected the cheque with the reason “payee/account holder expired” or “payee account not existing.” Instead, the bank marked it as “payment stopped by drawer”.
“The bank should have returned the cheque as it is as the payee was dead. But it gave the reason of payment stopped by the drawer. The reason should have been “payee/account holder expired” “payee account not existing”. The payee had expired more than nine months ago, yet the bank is entertaining a cheque in his name and operating the account of a dead person,” the counsel added.
The Bench was also told that the complaint was filed on August 31, 2023, almost a year after the person’s death. “Despite the fact that the payee of the cheque had already expired, his daughter, maliciously, presented the said cheque for clearance in a joint account she was holding with her father. She was obliged to inform the bank about his death on September 10, 2022. But she deliberately did not do so, in order to take undue advantage,” the counsel added.
The Bench was also told that the invalid document was used to file a criminal case against the petitioner in the form of a complaint under Section 138, even though none of the ingredients were fulfilled. “The complaint is not maintainable on the face of it as the ingredients of Section 138 of the Negotiable Instruments Act are not fulfilled. Without due application of mind and in a mechanical manner, the Judicial Magistrate First Class, Dera Bassi, issued notice/summons to the accused and warrants of arrest,” it was added, while seeking the quashing of the complaint and notice/summon/warrants, besides staying the proceedings.