V VATHSAN Vs. K K JAPAHARI

JUDGEMENT

(1.) These cases come up before us on a reference by a learned Single Judge. The question referred is whether S.138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the Act) is attracted in respect of a cheque dishonoured on account of the closure of the account on which it was drawn, even prior to its drawal. The decisions of this Court reported in Joseph v. Philip Joseph, 2000 (2) KLJ 679 and Japahari v. Priya ( 1993 (2) KLT 141 ) indicate that the account on which the cheque was drawn shall be maintained by the drawer at the time of drawal of the cheque to attract the said provision. It has been further held that S.138 of the Act will not be attracted if the cheque has been drawn after the closure of the account. But, when the matter came up before the learned Single Judge, a decision by the Bombay High Court reported in Shivendra v. M/s. Adineo ( 1996 CriLJ 1816 ) was pointed out. In that decision it was held that it was immaterial whether the account had been closed prior to or after the drawal of the cheque. That decision was rendered taking support from another Division Bench decision of that Court.

(2.) To answer the question, it is profitable to refer to the decisions reported in NEPC Micon Ltd. v. Magna Leasing Ltd., 1999 (4) SCC 253 and Goaplast (P) Ltd. v. Chico Ursula DSouza, 2003 (2) KLT (SC) 16). In the former, after analysing the ingredients of S.138, it was held as follows:

(3.) It is, worthwhile to quote from Geoplast Private Ltd.s case (supra), being contextually apt for this case, as follows: