Cheque bounced on account of being non-MICR cheque couldn’t be a ground for prosecution u/s 138 of NI Act

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  • Last Updated on 10 September, 2021

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Negotiable Instruments Act 1881 Dishonour of cheque

Case details: Md. Nasim Ansari v. State of Jharkhand - [2021] 129 taxmann.com 410 (Jharkhand)

Judiciary and Counsel Details

    • Mrs. Anubha Rawat Choudhary, J. 
    • Mrs. Ritu Kumar, Adv. for the Petitioner.
    • Mrs. Vandana Bharti, A.P.P. and Ashok Kr. Sinha, Adv. for the Respondent.

Facts of the Case

In the given case, the Complainant had presented two cheques issued by petitioner-accused but same were bounced for insufficiency of funds. Thereafter, the Complainant intimated accused about bouncing on 15-6-2007.

Later, when both cheques were again produced for encashment, they were returned by bank on ground of ‘non acceptance on account of it being non-MICR’. The Complainant sent legal notice on 24-7-2007 and filed a complaint on 6-9-2007 under section 138 against petitioner.

High Court Held

The Trial Court and Appellate Court held petitioner guilty of offence under section 138 of the NI Act. Since bouncing of cheques upon second presentation on account of them being not acceptable by bank (on account of being non-MICR cheque) was not on account of any act or omission of petitioner accused and could not be ground for prosecution under section 138 as one of conditions precedent for prosecution i.e. cheque itself should be valid on date of its presentation, was not satisfied when cheques were returned as not acceptable to bank on account of being non-MICR cheques

Case Review

List of Cases Referred to

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