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Criminal liability of defaulting drawer of cheque

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(From previous issue)

9. Mr. Rokanuddin Mahmud does not dispute the finding given by the High Court Division that the petition of complaint giving rise to the sessions case in question was filed complying with all the requirements as required by sections 138 and 141 of the Act, 1881, so in view of the findings given by the High Court Division and the submissions made by the learned Advocates for the respective parties, the questions to be decided in the petition for leave to appeal are (i) whether the dishonoured cheque being a crossed cheque "account payee" returned to the bank of the payee A.B. Bank unpaid with the endorsement "insufficiency of fund" would attract the mischief of Section 138 of the Act, 1881 (ii) whether the letter issue by the drawee bank on 30.08.2009 to the accused-petitioner to the effect that the signature of the drawer did not match with the signature "made on the cheque" can be taken into consideration in deciding the merit of a revision application preferred by the petitioner against the order framing charge under Section 138 of the Act, 1881 (iii) whether a pending civil suit in respect of the dishonoured cheque can be used as a shield by the accused for his protection from being  prosecuted in respect of an offence committed under Section 138 of the Act, 1881.
10. Cheque has been defined in Section 6 of the Act, 1881 as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. In section 6 nothing has been said about crossed cheque or an account payee cheque. We get the idea of crossed cheque or "account payee" cheque in section 123 and 123A of the Act, 1881. The said two sections read as follows: 123. Cheque cross generally-Where a cheque bears a cross across its face an addition of the words "and company" or any abbreviation thereof, between two parallel transverse lines, or of two paralleled transverse lines simply, either with or without the words "not negotiable", that addition shall be deemed a crossing arid the cheque shall be deemed to be crossed generally.
123A. Cheque cross "account payee" - (1) Where a cheque crossed generally bears across its face an addition of the words "account payee" between the two parallel transverse lines constituting the general crossing, the cheque, besides being crossed generally, is said to be crossed "account payee."
(2) When a cheque is crossed "account payee"-
(a) it shall cease to be negotiable; and
(b) it shall be the duty of the banker collecting payment of the cheque to credit the proceeds thereof only to the account of the payee named in the cheque.
11. From clause (a) of sub-section (2) of section 123 A it appears that when a cheque is crossed "account payee" it ceases to be negotiable. Now we are to see what is the legal implication of these words "shall cease to be negotiable"; to answer this question effectively and squarely, we are to see the provisions on section 138 of the Act, 1881. The admitted position being that the petition of complaint was filed complying with the requirements of Section 138 of the Act as spelt out in the proviso to sub-section (1) and the other sub-sections thereto, we are not required to consider those provisions but we are to consider the heading of Section 138 as well as subsection (1) without the proviso which read as follows:
138. Dishonour of cheque for insufficiency, etc. of funds in the account-(1). 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 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 any other provisions of this Act, be punished with imprisonment for a term which may extend to one year or with fine which may extend to thrice the amount of the cheque, or with both:
12. From a mere reading of sub-section (1) of Section 138 of the Act it is apparent that the legislature has consciously used the word 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. Legislature very well knew about section 123A of the Act. Had it been the intention of the legislature to exclude a crossed cheque account  payee" as used in clause (a) of sub-section (2) of section 123A from the mischief of sections 138 and 141 of the Act, 1881, then they would have definitely mentioned cheque other than 'crossed cheque'. It appears to us that the moment a cheque is dishonoured either a bearer cheque crossed  cheque" "account payee", for any reason whatsoever including the alleged dissimilarity of the signature of the drawer on the cheque as found by the High Court Division while interpreting the meaning of the abbreviation "etc." used in the heading of section 138, the offence under the section shall  be completed and in that case the payee shall have the liberty to file a petition of complaint before the competent Magistrate against the drawer of the cheque, of course, by complying with the proviso to sub-section (1) of Section 138. And in the instant case admittedly those requirements were dearly complied with before filing the case.
The legislative mandate as used in clause (a) of sub-section (2) of Section 123A of the Act, 1881 that when a cheque is crossed "account payee" shall cease to be negotiable means it cannot be negotiated or encashed with any other person except the person in whose favour the same was issued. To make it clearer, a crossed cheque "account payee" must be encashed through the account of the holder in whose favour it was issued. So, by no means, a crossed cheque" account payee" looses its character as a negotiable one within the meaning of Section 138 of the Act, 1881. Moreover, Section 13 of Act, 1881 which has defined "Negotiable instrument" has not made any distinction between crossed cheque "account payee" or cheque of other kind such as 'bearer cheque' as we ordinarily mean.
Thus, we find that Section 123 A of the Act, 1881, in no way, creates any bar in proceeding with a case under Section 138 of the Act, 1881, In other words, we do not see any nexus of section 123A with the proceedings to be initiated under Section 138 of the Act. If the interpretation of Mr. Mahmud about clause (a) of sub-section (2) of section 123A of the Act, is accepted then the whole purpose of bringing into book of the defaulting drawer of the cheque shall be frustrated; accordingly, we reject his contention on the point. So, we find nothing wrong with the order of the learned Joint Metropolitan Sessions Judge in framing charge against the petitioner under Section 138 of the Act, 1881.
13. The contention of Mr. Rokunuddin Mahmud that the cheque in the instant case was not dishonoured by the drawee bank because of the "insufficiency of fund" but because of the dissimilarity of the signature of the drawer on the cheque as apparent from annexure-X to the revision application, therefore, by such dishonourment no offence was committed by the accused has got no substance. It is the common banking practice that the holder of an account payee cheque deposits the cheque with his banker for collection of the amount of the cheque from the drawee bank through the clearing house. And in the instant case the said