The New Nation - Internet Edition

High Court Division

(Criminal Revisional Jurisdiction)

Sharifuddin Chaklader J

Md Emdadul Haque

Azad J

Judgment

March 6th, 2008

Khokan Bhuiyan and others ttttt.Accused-Petitioners

vs

Md Ahsanullah, State ttt. Opposite Parties·

Negotiable Instruments Act (XXVI of 1881) Section 138

The object of crossing is to secure payment not to any particular bank, but to a banker, in order that it may be easily traced for whose use the money was received. The crossing operates as a caution to the banker.

Self-drawn or open cheque is generally issued for immediate payment. A drawer if himself presented the cheque and if it is bounced then no action can be taken in any form but when the cheque delivered to a person who is the creditor and it is bounced, then action can be taken as the cheque was given and became property of the person who presented it at the counter of the bank t. (12)

Akrokerri Atlantic Mines Ltd. vs Economic Bank, (1904) 2KB 464 ref.

AQM Shafiullah, with Md Ali Zinnah.

Advocates, For the Petitioners.

Md Rafiqul Islam Miah with SM Zahangir Alam,

Advocates-For the Opposite Parties.

Syed Haider Ali, Deputy Attorney-General-For the State.

Judgment

Sharifuddin Chaklader J: This Rule, at the instance of the accused petitioner, 1. Khokon Bhuiyan, son of Shahjahan Bhuiyan, and 2. Shankar Shaha, Proprietor Messrs Megna Yarn Trading, for quashing the proceedings of Sessions Case No. 653 of 2006 arising out of Complaint Registered Case No. 177 of 2006, under section 138 of the Negotiable Instruments Act, 1881, instituted by the opposite party No. 2, pending in the Court of learned District and Sessions Judge, Narayangonj.

2. This Rule was obtained after framing of charge by the learned Judge, on 7-1-2007.

3. Complainant opposite party Md Ahsanullah in the petition of complaint alleges that, he had a long standing business transaction with accused petitioner No. 1, Khokon Bhuiyan, accused petitioner No.2, Shankar Shaha, accused No. 1 Shahjahan Bhuiyan and co-accuseds who on behalf of Shahjahan and Company purchased cotton from the complainant and naturally transactions were taken place through self endorsed cheques and usually accused petitioner No.1 on behalf of accused No.1 and Company, signed the cheques and complainant got commission for the cotton purchase by the accused persons through accused Nos. 1-3; accused petitioner No. I gave 5 self endorsed cheques, amounting to Taka 18,29,132, Accused Nos. 3 to 5, of them accused No.4 is accused petitioner No.2, in the same way of accused No. 1 and 2 purchased through broker cotton and gave commission' to the complainant through self endorsed cheques; Commission at present stands at Taka 14 lac against which accused Nos. 3 and 5 gave self endorsed 3 cheques; when the complainant placed those cheques for encashment on 7-5-2006, 9-5-2006 and 10-5-2006, the cheques were dishonoured; in total complainant is due from the accuseds Taka 32,29,132 for the 8 cheques. Thereafter, the complainant issued a legal notice on 13-5-2006 through his lawyer, to which the accused petitioners gave reply through their lawyer; it appears the legal notice issued by the complainant was received by the accuseds on 15-5-2006. It has further been stated in the complaint that it is the demand of the business of cotton market of Tan Bazar that in order to make payment quickly, self endorsed cheques were given to the broker or to the commission agents. Accuseds appeared and all the accused persons were enlarged on bail. It appears that against accused No. 2 and 4, i.e. against the petitioners, charge was framed under section 138 of the Negotiable Instruments Act as they signed the self enforsed cheques for payment.

4. Mr AQM Shafiullah, learned Advocate for the accused petitioners, submits, that under Negotiable Instruments Act, there is no provision to institute proceedings against self endorsed cheques, it relates to the crossed cheques. Learned Advocate elaborately submits that if the self endorsed cheque bounced then no offence is committed as no one is cheated or no one loses any thing, as such, instant proceeding is liable to be quashed.

5. Mr Md Rafiqul Islam Mian, learned Advocate, on the other hand, submits that, it is a natural practice in the local market that self endorsed cheque was given to the broker or to the seller and received for quick disbursement of money as, it requires for continuation of the business. Learned Advocate further submits that, dishonouring of self endorsed cheque is not an offence if it is presented by the drawer but when delivered to the complainant, the cheque become the property of the complainant and after the said cheque bounced then natural1y, section 138 of the Negotiable Instruments Act can be invoked as money was not cashed which is the money of the complainant.

6. Question calls for determination is, if self-endorsed cheque dishonoured whether a proceeding under section 138 of the Negotiable Instruments Act is maintainable?

7. Let us consider section 138 of Negotiable Instruments Act. Section 138 of the Act has penalty for dishonouring of certain cheques i.e. when any cheque drawn by a person on an account maintained by him with a banker for payment of any amount to any person from out of that account is returned by the bank unpaid, either because of the money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid.

8. Dishonouring of cheque is the prime factor for initiating the proceedings and dishonouring of cheque means either for insufficient fund or the money mentioned in cheque exceeded the money arranged for. Now by Court's decision, stop payment, (AIR 1996 SC 2339, 1996 Supreme Court Yearly Digest 711, (1990) 2 PLR 269) refer to Drawer, funds not arranged or account closed, (Dada Silk Mills vs Indian Overseas Bank (1995) 82 Company Cases, 35 and V. Arunmughan vs Mk Ponusamy, (1995) 85 Company Cases 296 (Mad) also means dishonour of cheque.

9. Let us see what is meant by self-drawn cheque as submitted by the learned Advocate for the petitioners. Negotiable Instruments Act generally recognize two types of cheque, one is open cheque i.e. self-drawn cheque a self endorsed cheque and another is crossed cheque. In crossed cheque there are also certain categories i.e. crossed generally, (section 123) and crossed account payee (section 123 A).

10. Section 123 of the Act speaks for crossed cheque. Where a cheque bears a cross on its face an addition of the words "and company" or any abbreviation thereof, between two parallel transverse lines, or of two ·paralleled transverse lines simple, either with or without the words "not negotiable" that addition shall be deemed a crossing and the cheque shall be deemed to be crossed generally.

11. Section 123 A of the Act, speaks for cheque crossed account payee (1) where a cheque crossed generally bears cross on its face an addition of the words "account payee" between the two parallel transverse lines constituting the general crossing the cheque besides being crossed generally, is said to be crossed "account payee" (2) When a cheque is crossed "account payee" (a) it shall cease to be negotiable; and

(b) it shall be the duty of the banker collecting payment of the cheque to credit the proceeds thereof , only to the account of the payee named in the cheque.

12. Open cheques are cheques which are paid on presentation from the counter of the bank. Selfdrawn cheque as submitted, is nothing but open cheque. This type of open cheque has some risk as it may be 'lost or the cheque can be cashed by anyone to whom the money was not intended to pay or the payment may be stopped for which a case may be filed but it will be difficult to prove that it was issued in favour of drawee and as there was so many complications so, by the decision of Akrokerri Atlantic Mines Lid. vs Economic bank, (1904) 2KB 464 system of crossed cheque has been introduced to protect the interest of both drawer and drawee of the cheques. Both categories of cheques bear the same value, in open cheque or self-drawn cheque a risk is there and in crossed cheque such risk is not there as it is drawn through a bank. The object of crossing is to secure payment not to any particular bank, but to a banker, in order that it may be easily traced for whose use the money was received. The crossing operates as a caution to the banker. Selfdrawn or open' cheque is generally issued for immediate payment. A drawer if himself presented the cheque and if it is bounced then no action can be taken in any form but when the cheque delivered to a person who is the creditor and it is bounced, then action can be taken as the cheque was given and became property of the person who presented it at the counter of the bank.

l3. In the instant case, we find the disputed cheque is self endorsed cheque to the drawer to the complainant and it is not presented by the drawer i.e. accused petitioner. The complainant placed the cheque for encashment at the counter and banker gives his signature on the back side noting bouncement of the cheque, is sufficient compliance of section 138 of the Negotiable, Instruments Act as from the facts of the instant case it is clearly seen the cheque was given to the complainant knowing fully well that there is no money in the account to honour the cheque.

It also appears that not only the notice was given by the complainant but the accused petitioner gave a reply to the said notice speaks guilty device on the part of the accused petitioner who acted mischievously in paying the complainant the money on self endorsed cheque with a dishonest intention not to pay the huge money of which the complainant is entitled from the accused petitioner.

14. We find no substance in the Rule.

15. In the result, the Rule is discharged.

16. Communicate this order at once.

The order of stay granted earlier by this Court is vacated.