SC directs Rajasthan trial court to restore proceedings in cheque bounce case

The Supreme Court has directed a trial court in Rajasthan to restore criminal proceedings in a cheque bounce case, noting that the cheque was returned with the “account frozen” remark.

A bench headed by Chief Justice N V Ramana passed the order on an appeal filed by a man against the Rajasthan High Court order which quashed the proceedings in the case.

The top court refused the submission that no case was made under Section 138 of the Negotiable Instruments Act against the accused as the bank managers have specifically deposed that no such bank account was opened and maintained in their bank.

“It is surprising that on the one hand, the bank managers have specifically deposed that no such bank account was opened and maintained in their bank while on the other hand the cheque drawn by the respondent in favour of the appellant, was returned with the remark “account frozen” in respect of the same cheque, the bench said.

The bench, also comprising Justices A S Bopanna and Hima Kohli, said the bank account has been mentioned on the cheque and the endorsement to the effect “account frozen” will presuppose that an account existed. “This is a matter which is to be taken into consideration by the trial court in detail, and not merely on the evidence of bank managers. “The parties will have to go through a full-fledged trial. In any event, it was not a matter the proceedings could have been quashed.

”We, accordingly, feel it was premature to quash the complaint filed by the appellant herein, by the high court. The impugned order passed by the high court is, accordingly, set aside,” the bench said.

It also directed the trial court to restore and take up the matter and conclude the same in accordance with law expeditiously and preferably within a period of six months.

Advocate Namit Saxena, appearing for the accused, argued that it is a mandatory requirement under section 138 of the Negotiable Instruments Act to have the cheque drawn on a bank account maintained by the accused. Saxena submitted that as necessary ingredients of Section 138 are not fulfilled in absence of a bank account, the accused cannot be subjected to trial.