When the matter of cheque dishonour comes within criminal liability of the drawer
High Court Division (Criminal Appellate Jurisdiction) :
Md Abdul Hye J
Md Badruzzaman J
Rafiqul Islam (Md)
Appellant-Complainant
vs
Babul and another
… Accused-Respondent*
Judgment
June 1st, 2013.
Negotiable Instruments Act (XXVI of 1881) Section 138(1)
The words ‘account closed’, has clearly indicated insufficiency of fund as contemplated in the section 138(1) of the Act which comes within the criminal liability of the drawer.
…… (14)
Khalilur Rahman vs Md Habibullah, 57 DLR 603 and Dada Silk Mills vs Indian Overseas Bank Company Cases Vol. 182 page 46, ref.
Mohammad Ali, Advocate – For the Complainant.
No one appears – For the Accused-Respondent.
Md Moniruzzaman (Rubel), DAG with Sawpan Kumar Das, AAG – For the State.
Judgment
Md Badruzzaman J: This appeal under section 417 of the Code of Criminal Procedure, is directed against the judgment and order dated 5-9-2012 passed by learned Metropolitan Joint Session Judge, 4th Court, Dhaka, in Metropolitan Sessions Case No. 6291 of 2011 arising out of CR Case No. 576 of 2011 under section 138 of the Negotiable Instrument Act, 1881, acquitting the accused-respondent No. 1.
2. The prosecution case, in short, is that the complainant-appellant filed a petition of complaint before the learned Chief Metropolitan Magistrate, Dhaka, on 13-2-2011 under section 138 of the Negotiable Instrument Act, 1881 implicating the accused respondent No.1 alleging, inter alia, that the accused respondent issued a cheque amounting to Taka 12,00,000 on 3-12-2010 in favour of complainant-appellant, which was presented in the account of complainant for encashment on 26-12-2010 and it was dishonoured with remark “account closed”. Thereafter, the complainant-appellant served registered legal notice with AID upon the accused on 5-1-2011 requesting him to pay the amount mentioned in the cheque but the respondent No.1 failed to pay the money within l(one) month and hence the case.
3. On receipt of such complaint, learned Magistrate after examining the complainant under section 200 of the Code of Criminal Procedure, took initial cognizance of the case against the accused-respondent under section 138 of the Negotiable Instrument Act, 1881 and the case was registered as CR Case No. 576 of 2011.
Accused respondent voluntarily surrendered before the learned Magistrate and obtained bail. After being ready, the case was transferred to learned Metropolitan Joint Sessions Judge, 4th Court, Dhaka, for trial. Thereafter, charge has been framed against the accused-respondent under section 138 of the Negotiable Instrument Act, which was read over to him and the accused respondent pleaded not guilty and claimed to be tried.
4. At that stage, the accused-respondent came up before this Court in Criminal Revision Case No. 32 of 2012, challenging the order of framing charge against him and a Division Bench of this Court after hearing both the parties, discharged the Rule by judgment dated 4-6-2012 and ultimately the trial commenced against the accused respondent.
During the trial, complainant examined himself us PW 1 and proved the cheque as Exhibit-I, information slip as Exhibit-2, legal notice with AID as Exhibit-3 series and complaint-petition as Exhibit-4.
5. The trial Court after considering the evidence on record, came to the following findings:-
Ò†b‡Mvwm‡qej BÝUªy‡g›Um G¨v± 1881 Gi 138 avivi weavb g‡Z ïaygvÎ `vwLjx †P‡K D‡jøwLZ UvKvi wecix‡Z mswkøó e¨vs‡K Ach©vß Znwej _vwK‡jB D³ avivq AÎ gvgjv iæRy nB‡e| †h‡nZz bvwjkx †P‡Ki wnmve †KvRW _vKvi Kvi‡Y D³ wWRAbvi wmøc Øviv AÎ gvgjv iæRy Kivi AvBbZ †Kvb weavb bvB| AvB‡bi weavb g‡Z ev`xi gvgjv ev`x‡KB cÖgvY Kwi‡Z nB‡e|
6. Learned Judge of the trial Court mainly on the aforesaid findings acquitted the accused-respondent of the charge under section 138 of the Negotiable Instrument Act by the impugned judgment dated 5-9-2012.
7. Being aggrieved by and dissatisfied with the aforesaid judgment and order of acquittal, complainant preferred this appeal which was admitted for hearing.
8. Mr Mohammad Ali, learned Advocate appearing on behalf of the appellant submits that in the instant case, the plain subject matter is the dishonour of cheque (Exhibit-I) issued by accused respondent Babul in favour of the complainant which clearly comes within the mischief of section 138 of the Act, 1881 since the impugned cheque has been returned unpaid for insufficiency of fund of the drawer’s account. He further submits that in normal banking parlance ‘account closed’ or ‘refer to drawer’ means that no funds are available and when an opportunity has been given to the drawer of the cheque by inviting his attention and when he has not paid the amount it has to be construed that ‘account closed’ ultimately resulted in dishonouring the cheque preventing the payee from getting such amount from the drawer’s account only on account of the act committed by the drawer.
Learned Advocate further submits that the learned Judge of the trial Court misinterpreted the provisions of section 138 of the Negotiable Instrument Act, 1881 in coming to the conclusion that ‘account closed’ does not come within the purview of section 138 of the Negotiable Instrument Act and illegally acquitted the accused respondent. Learned Advocate has also drawn our attention to the evidence adduced by the prosecution which remained unchallenged though it has been adduced in presence of the accused respondent.
He further submits that whereof opportunity for cross-examination having been offered, not only the deposition of the witnesses would be perfectly admissible, but the omission to cross-examine would be taken to mean that the truthfulness of the witness’s testimony is not disputed. In the circumstances, the impugned judgment and order of acquittal passed by the Court below should be interfered with by this Court and the appeal should be allowed converting the order of acquittal into conviction.
9. None appears on behalf of the accused respondent No.1 to oppose the appeal.
10. Mr Sawpan Kumar Das, learned Assistant Attorney-General appearing on behalf of the State supported the submission made by the learned Advocate for the appellant.
11. On the face of the submission as advance by the learned Advocate for complainant-appellant, a question arises for consideration is as to whether section 138 of the Act deals with dishonour of cheque or the reason of account closed do come within the purview of section 138 of the Negotiable Instrument Act and whether the judgment passed by the trial Court is justifiable under law.
12. Section 138 of the Act provides that a cheque drawn by a person for payment of any amount of money to any other person out of his account, is returned by the bank unpaid, either for insufficiency of amount to honour the cheque or it exceeds the amount arranged to be paid from that account by an arrangement with the bank, such person shall be deemed to have committed an offence under Section 138 of the Negotiable Instrument Act. However, certain conditions precedent is stipulated in the proviso of Section 138(1) which is to be complied with before initiating any criminal liability to ‘the drawer. Following the dishonour of a cheque, a notice is to be issued in writing to the person who has issued the cheque inviting his attention to the fact that the ‘cheque’ has been dishonoured for reasons stated in the return memo and that he is liable for penal consequences under Section 138 read with Section 141 of the Act.
When the reason for retum of the cheque has been mentioned as ‘account closed’ or ‘insufficiency of fund’ it is the primary duty of the drawer of the cheque to make payment of the said amount of money to the payee within 30 days from receipt of the said’ notice. In the case of Dada Silk Mills vs Indian Overseas Bank reported in Company Cases Vol. 182 page 46, it has been held:-
“That means the drawer of the cheque got an opportunity to know in advance before the filing of the complaint that the cheque was dishonoured for particular reason. When that information was made available to the drawer and he has not made any attempt to pay the same, it cannot be said that the cheque was not returned for insufficiency of fund or funds not arranged for.
In normal banking parlance ‘refer to drawer’ means that no funds are available and when an opportunity has been given to the drawer of the cheque by inviting his attention and when he has not paid the amount it has to be construed that ‘refer to drawer’ or ‘insufficiency of fund’ or ‘account closed, etc.” ultimately resulted in dishonouring the cheque preventing the payee from getting such amount from the drawer’s account only on account of the act committed by the drawer.”
(To be continued)
13. In the case of Khalilur Rahman vs Md Habibullah reported in 57 DLR 603 by relying upon the decision reported in Company Cases Vol. 182 page 46 His Lordship Mr Justice Md Anwarul Haque (as he was then) made the following observation:-
“Taking all these views in mind, I am of the opinion that the aforesaid submission ,made by the learned Advocate relating to those words ‘refer to drawer’ is based on a purely literal interpretation of the provision of Section 138. It totally failed to take into account the entire scheme of Section 138 read with Section 141 of the said Act. It also fails to take into account the object sought to be achieved by legislature by introducing Chapter XVII in the Negotiable Instruments Act, 1881. Moreover, from the heading of the section it becomes also clear that the legislature never intended to dishonour the cheques to be made punishable only in case of insufficiency of fund or exceeds the amount arranged to be paid since the word ‘etc’ has also been used there by the caption of the section. So, it can be easily presumed that legislature contemplated various other reasons where the cheque is dishonoured preventing the payee from encashing the face value of the cheque.
It is to be remembered that legislature has also installed a safety-valve by incorporating the clause (b) in Section 138(1) of the Negotiable Instruments Act, 1881 for the drawer from unnecessary harassment if he has got intention to pay the amount in question shown in the cheque.
Considering all these aspects, it can easily be held that the term ‘refer to drawer’ is a courteous way adopted by the bank to show its inability to honour the cheque for want of funds. It is also found that under the scheme of the Act, the offence punishable under Section 138 would be completed only upon the failure by the drawer to pay within fortnight of the receipt of notice from the payee of the dishonour of the cheque. When the drawer fails to make such payment within the period specified in Clause (C) of the proviso, the offence is complete.”
14. We are in respectful agreement with the above quoted decisions and we are of the view that endorsement of the words ‘account closed’ has clearly indicated insufficiency of fund as contemplated in the Section 138(1) of the Negotiable Instrument Act which comes within the criminal liability of the drawer.
15. In the instant case, the drawer i.e. the accused-respondent failed to pay the amount shown in the cheque (Exhibit-I) within the prescribed period, mentioned in clause (c) on receipt of notice under clause (b) of the section 138(1) of the Negotiable Instrument Act. On the other hand nothing has been denied by the defence which is available in the complaint petition in any way. Issuance of cheque (Exhibit-2), return of cheque with an endorsement account closed (Exhibit-2) and receipt of registered postal notice with A/D as required under Clause (b) of Section 138(1) of the Act (Exhibit-3 series) have not also been denied by the accused-respondent by way of cross examination of PW-l. Though the prosecution examined one witness in the case but as the accused respondent did not deny the fact of issuance of cheque, dishonoured by reason of account closed and receipt of legal notice, it can easily be considered that the prosecution has been able to prove the charge against accused respondent beyond reasonable doubt. But the learned Metropolitan Joint Sessions Judge misdirected himself in the total approach of the case and failed to appreciate and apply the laws and settled principles in resolving the controversy between the parties. The approach adopted by him is purely wooden and conclusion reached by him in recording a judgment of acquittal is laconic. As such the decision suffers from perversity, patent legality, the legal infirmity and fragrant error of law and thus caused grave miscarriage of justice by acquitting the licensed respondent and as such the judgment of acquittal is not sustainable. Law and justice demand that the impugned judgment of acquittal is liable to be set aside and is to be converted into conviction.
16. Considering the above facts and circumstances of the case we hold that the accused-respondent No.1 Babul is found guilty of offence under Section 138 of the Negotiable Instrument Act, 1881 and he deserves to be convicted thereunder with penalty.
17. In the result, the appeal is allowed. The judgment of acquittal dated 5-9-2012 passed by the learned Metropolitan Joint Sessions Judge, 4th Court, Dhaka, in Metropolitan Sessions Case No. 6291 of 2011 is set aside.
18. Accused-respondent is found guilty of offence under Section 138 of Negotiable Instrument Act, 1881 and he be convicted thereunder. The judgment of acquittal is converted one of conviction. The accused-respondent Babul is punished with simple imprisonment for 6 (six) months. The accused respondent shall surrender to the Court concerned immediately. In the event of failure on the part of accused respondent to surrender, the Court concerned shall take all steps for his apprehension and putting him into the jail.
19. The accused-respondent is also to pay a fine of Taka 12,00,000 (Taka Twelve lakh) within 30 days from the date of receipt of this judgment by the Trial Court. The fine shall have to be paid to the complainant-appellant and the complainant-appellant shall be entitled to receive that amount.
Communicate the judgment and order to the Court below at once, for compliance.
Md Abdul Hye J
Md Badruzzaman J
Rafiqul Islam (Md)
Appellant-Complainant
vs
Babul and another
… Accused-Respondent*
Judgment
June 1st, 2013.
Negotiable Instruments Act (XXVI of 1881) Section 138(1)
The words ‘account closed’, has clearly indicated insufficiency of fund as contemplated in the section 138(1) of the Act which comes within the criminal liability of the drawer.
…… (14)
Khalilur Rahman vs Md Habibullah, 57 DLR 603 and Dada Silk Mills vs Indian Overseas Bank Company Cases Vol. 182 page 46, ref.
Mohammad Ali, Advocate – For the Complainant.
No one appears – For the Accused-Respondent.
Md Moniruzzaman (Rubel), DAG with Sawpan Kumar Das, AAG – For the State.
Judgment
Md Badruzzaman J: This appeal under section 417 of the Code of Criminal Procedure, is directed against the judgment and order dated 5-9-2012 passed by learned Metropolitan Joint Session Judge, 4th Court, Dhaka, in Metropolitan Sessions Case No. 6291 of 2011 arising out of CR Case No. 576 of 2011 under section 138 of the Negotiable Instrument Act, 1881, acquitting the accused-respondent No. 1.
2. The prosecution case, in short, is that the complainant-appellant filed a petition of complaint before the learned Chief Metropolitan Magistrate, Dhaka, on 13-2-2011 under section 138 of the Negotiable Instrument Act, 1881 implicating the accused respondent No.1 alleging, inter alia, that the accused respondent issued a cheque amounting to Taka 12,00,000 on 3-12-2010 in favour of complainant-appellant, which was presented in the account of complainant for encashment on 26-12-2010 and it was dishonoured with remark “account closed”. Thereafter, the complainant-appellant served registered legal notice with AID upon the accused on 5-1-2011 requesting him to pay the amount mentioned in the cheque but the respondent No.1 failed to pay the money within l(one) month and hence the case.
3. On receipt of such complaint, learned Magistrate after examining the complainant under section 200 of the Code of Criminal Procedure, took initial cognizance of the case against the accused-respondent under section 138 of the Negotiable Instrument Act, 1881 and the case was registered as CR Case No. 576 of 2011.
Accused respondent voluntarily surrendered before the learned Magistrate and obtained bail. After being ready, the case was transferred to learned Metropolitan Joint Sessions Judge, 4th Court, Dhaka, for trial. Thereafter, charge has been framed against the accused-respondent under section 138 of the Negotiable Instrument Act, which was read over to him and the accused respondent pleaded not guilty and claimed to be tried.
4. At that stage, the accused-respondent came up before this Court in Criminal Revision Case No. 32 of 2012, challenging the order of framing charge against him and a Division Bench of this Court after hearing both the parties, discharged the Rule by judgment dated 4-6-2012 and ultimately the trial commenced against the accused respondent.
During the trial, complainant examined himself us PW 1 and proved the cheque as Exhibit-I, information slip as Exhibit-2, legal notice with AID as Exhibit-3 series and complaint-petition as Exhibit-4.
5. The trial Court after considering the evidence on record, came to the following findings:-
Ò†b‡Mvwm‡qej BÝUªy‡g›Um G¨v± 1881 Gi 138 avivi weavb g‡Z ïaygvÎ `vwLjx †P‡K D‡jøwLZ UvKvi wecix‡Z mswkøó e¨vs‡K Ach©vß Znwej _vwK‡jB D³ avivq AÎ gvgjv iæRy nB‡e| †h‡nZz bvwjkx †P‡Ki wnmve †KvRW _vKvi Kvi‡Y D³ wWRAbvi wmøc Øviv AÎ gvgjv iæRy Kivi AvBbZ †Kvb weavb bvB| AvB‡bi weavb g‡Z ev`xi gvgjv ev`x‡KB cÖgvY Kwi‡Z nB‡e|
6. Learned Judge of the trial Court mainly on the aforesaid findings acquitted the accused-respondent of the charge under section 138 of the Negotiable Instrument Act by the impugned judgment dated 5-9-2012.
7. Being aggrieved by and dissatisfied with the aforesaid judgment and order of acquittal, complainant preferred this appeal which was admitted for hearing.
8. Mr Mohammad Ali, learned Advocate appearing on behalf of the appellant submits that in the instant case, the plain subject matter is the dishonour of cheque (Exhibit-I) issued by accused respondent Babul in favour of the complainant which clearly comes within the mischief of section 138 of the Act, 1881 since the impugned cheque has been returned unpaid for insufficiency of fund of the drawer’s account. He further submits that in normal banking parlance ‘account closed’ or ‘refer to drawer’ means that no funds are available and when an opportunity has been given to the drawer of the cheque by inviting his attention and when he has not paid the amount it has to be construed that ‘account closed’ ultimately resulted in dishonouring the cheque preventing the payee from getting such amount from the drawer’s account only on account of the act committed by the drawer.
Learned Advocate further submits that the learned Judge of the trial Court misinterpreted the provisions of section 138 of the Negotiable Instrument Act, 1881 in coming to the conclusion that ‘account closed’ does not come within the purview of section 138 of the Negotiable Instrument Act and illegally acquitted the accused respondent. Learned Advocate has also drawn our attention to the evidence adduced by the prosecution which remained unchallenged though it has been adduced in presence of the accused respondent.
He further submits that whereof opportunity for cross-examination having been offered, not only the deposition of the witnesses would be perfectly admissible, but the omission to cross-examine would be taken to mean that the truthfulness of the witness’s testimony is not disputed. In the circumstances, the impugned judgment and order of acquittal passed by the Court below should be interfered with by this Court and the appeal should be allowed converting the order of acquittal into conviction.
9. None appears on behalf of the accused respondent No.1 to oppose the appeal.
10. Mr Sawpan Kumar Das, learned Assistant Attorney-General appearing on behalf of the State supported the submission made by the learned Advocate for the appellant.
11. On the face of the submission as advance by the learned Advocate for complainant-appellant, a question arises for consideration is as to whether section 138 of the Act deals with dishonour of cheque or the reason of account closed do come within the purview of section 138 of the Negotiable Instrument Act and whether the judgment passed by the trial Court is justifiable under law.
12. Section 138 of the Act provides that a cheque drawn by a person for payment of any amount of money to any other person out of his account, is returned by the bank unpaid, either for insufficiency of amount to honour the cheque or it exceeds the amount arranged to be paid from that account by an arrangement with the bank, such person shall be deemed to have committed an offence under Section 138 of the Negotiable Instrument Act. However, certain conditions precedent is stipulated in the proviso of Section 138(1) which is to be complied with before initiating any criminal liability to ‘the drawer. Following the dishonour of a cheque, a notice is to be issued in writing to the person who has issued the cheque inviting his attention to the fact that the ‘cheque’ has been dishonoured for reasons stated in the return memo and that he is liable for penal consequences under Section 138 read with Section 141 of the Act.
When the reason for retum of the cheque has been mentioned as ‘account closed’ or ‘insufficiency of fund’ it is the primary duty of the drawer of the cheque to make payment of the said amount of money to the payee within 30 days from receipt of the said’ notice. In the case of Dada Silk Mills vs Indian Overseas Bank reported in Company Cases Vol. 182 page 46, it has been held:-
“That means the drawer of the cheque got an opportunity to know in advance before the filing of the complaint that the cheque was dishonoured for particular reason. When that information was made available to the drawer and he has not made any attempt to pay the same, it cannot be said that the cheque was not returned for insufficiency of fund or funds not arranged for.
In normal banking parlance ‘refer to drawer’ means that no funds are available and when an opportunity has been given to the drawer of the cheque by inviting his attention and when he has not paid the amount it has to be construed that ‘refer to drawer’ or ‘insufficiency of fund’ or ‘account closed, etc.” ultimately resulted in dishonouring the cheque preventing the payee from getting such amount from the drawer’s account only on account of the act committed by the drawer.”
(To be continued)
13. In the case of Khalilur Rahman vs Md Habibullah reported in 57 DLR 603 by relying upon the decision reported in Company Cases Vol. 182 page 46 His Lordship Mr Justice Md Anwarul Haque (as he was then) made the following observation:-
“Taking all these views in mind, I am of the opinion that the aforesaid submission ,made by the learned Advocate relating to those words ‘refer to drawer’ is based on a purely literal interpretation of the provision of Section 138. It totally failed to take into account the entire scheme of Section 138 read with Section 141 of the said Act. It also fails to take into account the object sought to be achieved by legislature by introducing Chapter XVII in the Negotiable Instruments Act, 1881. Moreover, from the heading of the section it becomes also clear that the legislature never intended to dishonour the cheques to be made punishable only in case of insufficiency of fund or exceeds the amount arranged to be paid since the word ‘etc’ has also been used there by the caption of the section. So, it can be easily presumed that legislature contemplated various other reasons where the cheque is dishonoured preventing the payee from encashing the face value of the cheque.
It is to be remembered that legislature has also installed a safety-valve by incorporating the clause (b) in Section 138(1) of the Negotiable Instruments Act, 1881 for the drawer from unnecessary harassment if he has got intention to pay the amount in question shown in the cheque.
Considering all these aspects, it can easily be held that the term ‘refer to drawer’ is a courteous way adopted by the bank to show its inability to honour the cheque for want of funds. It is also found that under the scheme of the Act, the offence punishable under Section 138 would be completed only upon the failure by the drawer to pay within fortnight of the receipt of notice from the payee of the dishonour of the cheque. When the drawer fails to make such payment within the period specified in Clause (C) of the proviso, the offence is complete.”
14. We are in respectful agreement with the above quoted decisions and we are of the view that endorsement of the words ‘account closed’ has clearly indicated insufficiency of fund as contemplated in the Section 138(1) of the Negotiable Instrument Act which comes within the criminal liability of the drawer.
15. In the instant case, the drawer i.e. the accused-respondent failed to pay the amount shown in the cheque (Exhibit-I) within the prescribed period, mentioned in clause (c) on receipt of notice under clause (b) of the section 138(1) of the Negotiable Instrument Act. On the other hand nothing has been denied by the defence which is available in the complaint petition in any way. Issuance of cheque (Exhibit-2), return of cheque with an endorsement account closed (Exhibit-2) and receipt of registered postal notice with A/D as required under Clause (b) of Section 138(1) of the Act (Exhibit-3 series) have not also been denied by the accused-respondent by way of cross examination of PW-l. Though the prosecution examined one witness in the case but as the accused respondent did not deny the fact of issuance of cheque, dishonoured by reason of account closed and receipt of legal notice, it can easily be considered that the prosecution has been able to prove the charge against accused respondent beyond reasonable doubt. But the learned Metropolitan Joint Sessions Judge misdirected himself in the total approach of the case and failed to appreciate and apply the laws and settled principles in resolving the controversy between the parties. The approach adopted by him is purely wooden and conclusion reached by him in recording a judgment of acquittal is laconic. As such the decision suffers from perversity, patent legality, the legal infirmity and fragrant error of law and thus caused grave miscarriage of justice by acquitting the licensed respondent and as such the judgment of acquittal is not sustainable. Law and justice demand that the impugned judgment of acquittal is liable to be set aside and is to be converted into conviction.
16. Considering the above facts and circumstances of the case we hold that the accused-respondent No.1 Babul is found guilty of offence under Section 138 of the Negotiable Instrument Act, 1881 and he deserves to be convicted thereunder with penalty.
17. In the result, the appeal is allowed. The judgment of acquittal dated 5-9-2012 passed by the learned Metropolitan Joint Sessions Judge, 4th Court, Dhaka, in Metropolitan Sessions Case No. 6291 of 2011 is set aside.
18. Accused-respondent is found guilty of offence under Section 138 of Negotiable Instrument Act, 1881 and he be convicted thereunder. The judgment of acquittal is converted one of conviction. The accused-respondent Babul is punished with simple imprisonment for 6 (six) months. The accused respondent shall surrender to the Court concerned immediately. In the event of failure on the part of accused respondent to surrender, the Court concerned shall take all steps for his apprehension and putting him into the jail.
19. The accused-respondent is also to pay a fine of Taka 12,00,000 (Taka Twelve lakh) within 30 days from the date of receipt of this judgment by the Trial Court. The fine shall have to be paid to the complainant-appellant and the complainant-appellant shall be entitled to receive that amount.
Communicate the judgment and order to the Court below at once, for compliance.