1. Rule. By consent heard forthwith.

2. The only question that arises in this Revision Application is whether the prosecution under Section 138 of the Negotiable Instruments Act against the drawer of a post-dated cheque who, after issuing the cheque closed the account in the Bank, is sustain-. able, in the event of the cheque being dishonoured.

3. The bare facts of the case are that the accused (the petitioner herein) was engaged in the distribution of liquors and wines to retailers and he used to purchase from the complainant (the respondent herein) bulk quantities of various types of liquors on credit basis from 1991 onwards. When the accounts between the petitioner and the respondents struck, the petitioner was liable to pay a balance of Rs. 6,03,893 as on 4-7-1992 towards the transactions of purchase of liquors and wines on credit basis. On a settlement arrived between the parties, towards the part payment of the said dues, 3 cheques were issued by the petitioner, one of the cheques being cheque No. 0057511 dated 5-9-1992 drawn on the Goa Urban Co-operative Bank Ltd. for a sum of Rs. 2,00,000/-. The respondent presented the cheque for encashment on 10-9-1992 but the same was returned by the Bank with the endorsement “account closed”. A lawyer's notice dated 14-9-1992 was followed in pursuance of Section 138 of the Negotiable Instruments Act calling upon the petitioner to pay the said-amount within a period of 15 days. The petitioner received the said notice on 14-9-1992. On failure to make payment in consistence with Section 138 of the Negotiable Instruments Act, the respondent preferred a complaint before the learned Judicial Magistrate, First Class, atQuepem. The representative of the Bank and the complainant were examined. It has come out in evidence that the Bank returned the cheque with an endorsement: “Account closed on 3-9-92”. None was examined on behalf of the petitioner, but it was apparent in the context of the cross-examination of the prosecution witnesses by and on behalf of the accused that the petitioner was trying to make out a case that the cheque was issued as a security, that though in fact no amount was due to the respondent, that the said cheques were obtained from him on the understanding that the goods of the said amount would be supplied by the respondent to the petitioner in future and in the event the respondent makes such supplies, he could encash the said cheque. It was further contended on behalf of the petitioner before the learned Magistrate that since the account was closed before the cheque was issued, the transaction will not come under Section 138 of the Negotiable Instruments Act. However, the learned Magistrate rejected all the contentions of the petitioner and convicted him for an offence under Section 138 of Negotiable Instruments Act and sentenced him to pay a fine of Rs. 5,000/- and to undergo simple imprisonment for 1 year and in default of payment of fine to undergo additional imprisonment for a period of 3 months.

4. The matter was taken in appeal by the petitioner before the District and Sessions Judge, South Goa, Margao as Criminal Appeal No. 2 of 1994 which was also dismissed by the learned District Judge by his Judgment dated 6th March, 1995. It is in this context that the petitioner approached this Court for setting aside the impugned judgments of the Courts below.

5. The learned counsel for the petitioner, Mr. Thali, reiterated all the contentions which were raised by his counterparts in the lower Courts on behalf of the petitioner. Relying upon the wording of Section 138 he contended that the transaction will not come under the mischief of Section 138. Great emphasis has been laid by the counsel for the petitioner on the words occurring in Section 138: “funds in the account”, “an account maintained by him”, “out of that account”, “to the credit of that account”. Emphasizing on these words he argued that in order to attract Section 138 the cheque drawn should be on an account which must be alive on the date of drawing the cheque. He argued that in this case it has come out that the Bank Account No. 9247 was dormant for sometime which was revived on 7-8-1992 by depositing Rs. 100/-. He took cheque facilities on 6-8-1992. On 27-8-1992 he closed the account. In fact cheques were issued in September, 1992. Based on this factual position, Mr., Thali argued that the cheque was issued on 4-7-1992 though post-dated to 5-9-1992. The account was closed before that date, on 3-9-1992. Therefore, on the date of the presentation of the cheque to the Bank, there was no account and, therefore, Section 138 will not attract. He also relied upon a decision of a single Judge of Kerala High Court in Japahari v. Priya, (1994) 1 Crimes 379. He relied upon a casual observation made by the learned single Judge in that judgment in para 8, that complainant should establish that when the cheque was issued accused had art account in the Bank. The learned counsel for the petitioner, however, did not focus on the actual dictum laid down in that decision. He had also referred to para 5 of the judgment which states as follows:—

“A cheque cannot be issued de hors an account maintained by its drawer with the banker. Section 6 of the Act says that a cheque is a bill of exchange drawn on a specific banker. No person can draw a cheque if he does not have an account with a banker. When the cheque is returned by the bank unpaid because of the amount of money standing to the credit of “that account” is insufficient to honour the cheque, it is open to the holder of the cheque to make demand for payment as indicated in Clause (b) of the proviso………”

On a complete reading of the judgment, one would see the said decision cannot be relied upon by the counsel for the petitioner because it is in fact against the petitioner. Be that as it may, the legal position as regards the dishonouring of the cheque has been laid down by this Court in Rakesh Porwal v. Narayan Joglekar, 1993 Cri LJ 680. A Division Bench of this Court enumerating all the decisions of several High Courts on the subject, observed thus:

“A clear reading of S. 138 leaves no doubt in our mind that the circumstances under which such dishonour takes place are required to be totally ignored. In this case, the law only takes note of the fact that the payment has not been forthcoming and it matters little that any of the manifold reasons may have caused that situation. If, for instance, the closure of an account or the stoppage of payment of any other of the common place reasons for dishonour were to be justifiable, then, the legislature would have set these out in the section as exceptions not constituting an offence. No such intention can be read into Section 138, as none exists. The solitary exception made by the Legislature is with regard to the drawer being offered a final opportunity of paying up the amount within 15 days from the receipt of notice which, in other words, provides a last opportunity to prove one's bona fides. It is obvious, that having regard to the wide-spread practice of issuing cheques which are dishonoured and the many ingenious methods of avoiding payment that are practice, that the legislature has opted for a no-nonsense situation.”

6. The learned counsel for the petitioner though cited several decisions of different High Courts, could not place before me any other binding authority contrary to what has been stated by this Court in the aforesaid judgment. As pointed out by the Division Bench of this Court, the Legislature has stated expressly in Section 138 only one circumstance under which a cheque can be dishonoured. There could be so many circumstances both anticipated or unanticipated by the Legislature under which a Banker dishonours a cheque and the Legislature intends to cover all such eventualities that emanate from the present day commercial practices by implication. The Legislature certainly did not want to limit the operation of the said Section to a particular circumstances as such circumstances will be manifold in the commercial world under which a cheque could be dishonoured. Legislature wanted in its wisdom to rope in all such circumstances that may originate in future also and that is why it used the word “etc.” in the sub-title of the Section. Insufficiency of funds is only one of the contingencies that can happen in the commercial transaction which results in dishonouring of a cheque. Therefore the contention of the counsel for the petitioner that Section 138 only takes into account one circumstance, namely, the insufficiency of funds and all other circumstances will fall outside the purview of Section 138 cannot be accepted.

7. It is also equally fallacious that in order to come under the ambit of Section 138 there must be a bank account alive at the time of presentation of a cheque in the bank. In fact, in order to come under the mischief of Section 138, two events alone need be established. First, that cheque drawn on a Bank should be dishonoured by the Banker on its presentation. Mere dishonouring of a cheque cannot implicate the drawer of the cheque under Section 138. The holder of the cheque should bring to the notice of the drawer of the cheque the event of dishonouring within 15 days from the date of dishonour and in case the drawer of the cheque did not pay the amount covered by the cheque within 15 days thereafter, then only Section 138 will attract. Therefore, the ground under which the cheque was dishonoured is not very material. The fact that the cheque was dishonoured alone is material as indicated in the Objects and Reasons of the Amendment of Negotiable Instruments Act bringing Section 138 in the statute book. The acceptability of the cheque in the business transaction and harassing the innocent drawer on a mistake committed by him due to an oversight are the two events that are intended to be taken care of by the Legislation. In fact, by this piece of Legislation instances of issuing of a cheque lightheartedly or in a playful manner or with a dishonest intention has been curtailed. It aims at bringing in more credibility to the business transaction covered by a negotiable instrument like cheque so that people could transact with full confidence through cheque as good as money received. The only thing that the Act presupposes is that if a cheque is drawn it should be drawn with a responsibility. In that event, if some negligible mistakes committed by the drawer such as omission for signing, corrections not being initialled, dates not being properly put, names not being properly written and also the bona fide belief that there is sufficient money in the account to honour the cheque can all be taken care of and be given 15 days time to correct those mistakes. The penal liability under Section 138 arises only where a drawer refuses to correct or rectify these mistakes. In other words, once the cheque is issued, law takes care to see that it is honoured, failing which an erring drawer will be penalised. Mistake by oversight or any other reason could be cured within 15 days. If this is the mechanism with which Section is being operated, then as pointed out by the Division Bench of this Court in the above judgment, the ground for dishonour is immaterial. It can very well be on closure of account also. If this ground is not held to be one covered under Section 138 of the Negotiable Instruments Act, then the very purpose of the legislation would be defeated. If a debtor, with an ulterior motive issues a cheque in discharge of his debt and closes the account before or after the issuance of cheque to avoid payment, is doing it on his own risk.

8. The observations of the learned Judge of the Kerala High Court that if a cheque is dishonoured on account of closure of an account will not snowball into an offence under Section 138, cannot be accepted in view of the intention and purpose of the legislation. If such a view is accepted, the very credibility and acceptability of the cheque transaction will be in jeopardy. The Court must be more concerned about giving effect to the legislation than paving way for the culprits to escape from the liability by giving a narrow interpretation to Section 138 of the Act and exclude all eventualities except insufficiently of funds. Therefore, I do not find any force in the contention of the counsel for the petitioner that at the time of drawing the cheque, or at the time of its presentation, there be an account in the Bank cannot be accepted. Account mentioned therein only relates to the fund not to the cheque and section only recognizes a facility of discharging a debt by issuing a cheque. An account-holder alone will be able to utilise that facility. Here the petitioner perpetrated an evil design by closing the account and issuing the cheque. The Section takes care of all dishonest acts likely to be committed by the drawer of the cheque as the main purpose of the Section being to bring in the acceptability to the cheque. This is more relevant today when we usher into a world of free market company and international trade in a big way.

9. The problem unfolded in this case can be looked into another angle. Cheque facility is afforded by a Bank to its customer only when a customer opens an account in a Bank with funds. This is part of its Banking activity. This prerogative is available for a Bank under the provisions of the Banking Regulation Act. “Banking” has been defined under the said Act. Section 5 (a) of the Banking Regulation Act reads hereunder:—

“Banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.”

This section clearly mandates that a cheque can be used by its customer for withdrawing the money from the Bank. When a customer of the Bank draws a cheque in discharge of his debt, the Banker steps into the shoes of the customer or drawer to pay the money shown in the cheque to the payee of the cheque. Law, therefore, does not take cognizance of a situation to issuance of a cheque without an account in the Bank. If any customer closes an account with the Bank, it is the legal responsibility of the Banker to see that all unused cheque leaves are surrendered to the Bank and see that the cheque issued by the customer before closure of account is honoured. If any Banker does not observe this obligation it is liable not only under the Banking Regulation Act but also liable for damages to the person in whose favour the cheque was issued. However, this obligation of the Banker does not absolve the drawer from the liability in the event of the cheque being dishonoured, under Section 138 of Negotiable Instruments Act. If he closes the account before or after the issuance of the cheque because when cheque is drawn in discharge of a pecuniary liability, it can be always presumed that there exists an account in the Bank in the name of a drawer. This presumption, however, cannot be displaced by misusing cheque facility after closing the account. In such circumstances the drawer of the cheque is not only liable under Section 138 of the Negotiable Instruments Act, but also under Banking Regulation Act. At any stretch of reasoning, it cannot be said that such misuser of cheque is not liable under Section 138 of the Negotiable Instruments Act, To hold otherwise will render the whole object of the legislation infructuous.

10. In view of the above discussion, I find no reason to interfere with the judgment of the Court below. Closure of account will come under the purview of Section 138 of the Negotiable Instruments Act.

11. The Criminal Revision Application is dismissed. There shall be no order as to costs. Rule discharged.

12. Application dismissed.