Case Law Details
Parvaiz Ahmad Bhat Vs Fida Mohamamd Ayoub (Jammu and Kashmir High Court)
The question whether stop payment instructions, which result in dishonor of a cheque, would amount to an offence under Section 138 of the NIA Act, was considered by the Supreme Court in M. M. T. C. Ltd. Vs. M/S Medchl Chemicals, (2001) 1 SCC 234, and it was held that same would come within the ambit of definition of offence under Section 138 of the NIA Act. Similar view was taken by the Supreme Court in the case of Goaplast (P) Ltd vs. Chico Ursula D’Souza, (2003) 3 SCC 232.
In the face of foregoing discussion, it is clear that the Supreme Court has interpreted the provisions contained in Section 138 of the NI Act in a liberal manner so as to achieve the object for which the said provision has been enacted. Not only the cases of dishonour of cheques on account of insufficiency of funds or on account of exceeding of arrangement but the cases involving dishonour of cheques on accounts of “stop payment” and “account closed” have also been brought within the ambit of offence under the aforesaid provision.
In Vinod Tanna’s case (supra), the Supreme Court, while dealing with a case where the cheque drawn by the accused was not been honoured by the bank on account of drawer’s signatures being incomplete, held that dishonour of cheque for the aforesaid reason would not constitute an offence under Section 138 of the NI Act and, accordingly, the criminal proceedings against the accused were quashed.
The aforesaid decision of the Supreme Court came up for consideration before the same Court in the case of Laxmi Dyechem vs. State of Gujarat and others, (2012) 13 SCC 375. The Court, after noticing its earlier decisions on interpretation of the provisions of Section 138 of the NI Act, made the following observations:
Please become a Premium member. If you are already a Premium member, login here to access the full content.
