CH Lekh Raj Educational and Charitable Trust & Ors. Vs S.A. Infotech Private Limited (Delhi High Court)
Cheque Dishonour: Bank-Initiated Account Closure Offers No Benefit Where Funds Were Grossly Insufficient
Introduction
The Delhi High Court has dismissed petitions seeking reopening of defence evidence in cheque dishonour proceedings, holding that proof of bank-initiated account closure would not benefit the accused where the available balance was grossly insufficient to honour the cheques.
In CH Lekh Raj Educational and Charitable Trust & Ors. v. S.A. Infotech Private Limited, Justice Mini Pushkarna upheld the Trial Court’s refusal to summon bank officials to explain the circumstances of account closure.
The common judgment, delivered on 30 October 2026 in CRL.M.C. 8142–8146/2026, concerned an evidentiary request made at the stage of judgment. The High Court found no infirmity in the order rejecting that request.
Background of the Dispute
The respondent had instituted complaints under Section 138 of the Negotiable Instruments Act, 1881, after the cheques in question were dishonoured with the remark “Account Closed.”
The petitioners maintained that they had not intentionally closed the account. Their case was that the State Bank of India, Yamuna Nagar, Haryana Branch, had closed it pursuant to Reserve Bank of India instructions and circulars.
To establish this explanation, they sought limited reopening of defence evidence and the summoning of the relevant bank officials, together with original banking records.
The Trial Court rejected their application on 24 October 2026. The petitioners then approached the High Court seeking to have that order quashed.
Statutory Provisions Invoked
The petitions invoked Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, along with Section 482 of the Code of Criminal Procedure, 1973.
The underlying application for summoning bank witnesses had been filed under Section 311 CrPC/Section 348 BNSS.
The issue before the High Court was whether the Trial Court had erred in refusing the requested additional defence evidence. The petitions did not call upon the High Court to pronounce a final verdict on every ingredient of the underlying cheque dishonour complaints.
Petitioners’ Argument for Additional Evidence
The petitioners argued that only the bank officials and relevant records could establish whether account closure was voluntary or pursuant to directions of a competent authority.
They submitted that denying this opportunity would seriously prejudice their ability to establish their defence.
Counsel also stated that a relevant letter dated 8 September 2021 had been traced only recently. The application was therefore filed to produce and prove that document through competent bank officials and original records.
In support, the petitioners relied upon the Karnataka High Court decisions in Adinarayana v. P.N. Sridhar Bhattar, MANU/KA/2871/2013, and Nagaraja Upadhya v. M. Sanjeevan, 2007 SCC OnLine KAR 214.
Their proposed evidence thus focused on explaining who initiated the closure and why.
Respondent’s Opposition
The respondent strongly opposed reopening the evidence. Its counsel submitted that the petitioners had issued 30 cheques, whose dishonour had resulted in 29 complaints.
Counsel further asserted that approximately ₹2.50 crore was owed to the respondent.
These figures were recorded as the respondent’s submissions. The High Court’s reasoning for rejecting interference centred on the account balance and the limited value of the proposed evidence, rather than a fresh adjudication of the entire asserted liability.
Account Balance Was the Decisive Factor
The High Court noted that the application to reopen defence evidence had been filed only at the judgment stage.
More significantly, the Trial Court had categorically recorded that the account contained just ₹8,383 at the time of closure. That amount was grossly inadequate to honour the cheque in question.
The High Court therefore reasoned that, even if the bank had closed the account on its own instructions, the petitioners still lacked sufficient funds.
Likewise, even assuming closure occurred under RBI instructions, establishing that circumstance would confer no benefit on the petitioners in the facts presented. The proposed explanation did not address the independently significant shortage of funds.
Karnataka Decisions Distinguished
The Court distinguished the Karnataka High Court judgments relied upon by the petitioners.
According to the judgment, those decisions did not contain a finding that the balance available in the relevant account was grossly insufficient to honour the cheques. In those circumstances, benefit had been extended because the accused had not initiated account closure.
The present case involved an additional factual finding: the account lacked adequate funds. That difference prevented the petitioners from obtaining similar relief merely by proving that closure was beyond their control.
Decision and Significance
Finding no infirmity in the Trial Court’s order, the High Court dismissed all five petitions and disposed of the pending applications.
The ruling upholds the refusal to reopen defence evidence in these circumstances. It does not record a fresh conviction or announce that every bank-initiated closure necessarily establishes liability under Section 138.
Its central finding is specific: where the account balance was already grossly insufficient, evidence attributing closure to the bank or RBI instructions would not provide the benefit claimed by the petitioners.
Cases Discussed
1. Adinarayana Vs P.N. Sridhar Bhattar (Karnataka High Court); MANU/KA/2871/2013. Relied upon by the petitioners in support of their argument that bank-initiated closure could provide a defence. The Delhi High Court distinguished the decision because it did not contain a finding of grossly insufficient funds in the relevant account.
2. Nagaraja Upadhya Vs M. Sanjeevan (Karnataka High Court); 2007 SCC OnLine KAR 214. Cited by the petitioners concerning account closure not initiated by the accused. Distinguished because the available account balance in the present proceedings was independently found to be grossly inadequate to honour the cheques.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present petitions have been filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”)/Section 482 of the Code of Criminal Procedure, 1973 (“CrPC”), seeking quashing of the order dated 24th October, 2026, passed by the Court of the Judicial Magistrate (NI Act) – 06, South East, Saket, Delhi.
2. By way of the impugned order, the application of the petitioners herein, under Section 311 of the CrPC/Section 348 of the BNSS, for summoning the bank officials of the State Bank of India, Yamuna Nagar, Haryana Branch (“Bank”) as witnesses, was dismissed.
3. Learned counsel appearing for the petitioners submits that in the present case, the respondent has instituted complaints under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”), on the basis of the cheques in question being dishonoured with the remarks ‘Account Closed’.
4. It is the case of the petitioners that the petitioners had not intentionally got the said account closed, but it was closed by the Bank in view of the instructions and circulars of the Reserve Bank of India (“RBI”).
5. Thus, it is the case of the petitioners that the petitioners had sought limited reopening of the defence evidence and summoning of the concerned bank officials for proving the circumstances and reasons for closure of the bank account.
6. Learned counsel appearing for the petitioners submits that the fact that whether the closure of the bank account was voluntary or pursuant to the directions of a competent authority, can only be ascertained through the examination of the concerned bank officials, and the relevant bank records. Therefore, denial of such opportunity would seriously prejudice the petitioners in establishing their defence before the Trial Court.
7. He submits that the letter dated 08th September, 2021, in this regard, was traced only recently, upon which the application was filed before the Trial Court, seeking permission to produce and prove the said document through competent bank officials and original bank records.
8. However, vide impugned order dated 24th October, 2026, the Trial Court has dismissed the said application, on account of which the present petition has been filed.
9. Learned counsel appearing for the petitioners has relied upon the judgment in the case of Adinarayana Versus P.N. Sridhar Bhattar, MANU/KA/2871/2013, and the judgment in the case of Nagaraja Upadhya Versus M. Sanjeevan, 2007 SCC OnLine KAR 214, both passed by the High Court of Karnataka, in support of his submissions.
10. Per contra, learned counsel appearing for the respondent has vehemently opposed the present petitions.
11. He submits that the petitioners had issued a total of 30 (thirty) cheques to the respondent, which were dishonoured, leading to filing of 29 (twenty-nine) complaints.
12. He further submits that the petitioners owe a sum of approximately Rs. 2,50,00,000/- (Rupees Two Crore Fifty Lacs only) to the respondent.
13. I have heard learned counsels for the parties, and have perused the record before this Court.
14. At the outset, it is to be noted that the application for reopening of defence evidence was filed by the petitioners herein, only at the stage of judgment before the Trial Court. Furthermore, the Trial Court has categorically recorded that there was balance of only a sum of Rs. 8383/- (Rupees Eight Thousand Three Hundred and Eighty-Three only) in the bank account of the petitioners herein, at the time of its closure which was grossly insufficient to honour the cheque in question.
15. Accordingly, it is clear that even if the account was closed on the instructions of the bank, the petitioners did not have sufficient amounts in their account.
16. The judgments relied upon by the petitioners are clearly distinguishable, as there is no finding contained therein qua the amount lying in the account being grossly insufficient and inadequate to honour the cheques in question. Thus, in these circumstances, since the account had not been closed at the instance of the accused therein, benefit was granted to the accused therein and they were not held guilty of the offence under Section 138 of the NI Act.
17. However, in the present case, even if it were to be taken that the accounts were not closed by the petitioners, but under the instructions of the RBI, no benefit would accrue in favour of the petitioners.
18. As noted hereinabove, the balance in the accounts of the petitioners was grossly inadequate in comparison to the amounts for which the cheques had been issued.
19. No infirmity is found in the impugned order passed by the Trial Court.
20. The present petitions are accordingly dismissed.
21. Pending applications also stand disposed of.
