# Smt. Archana Singh Gautam v. State of U.P. & Anr. Opp. Parties

- **Citation:** (2024) 6 ILRA 89
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-06-05
- **Case number:** Application u/s 482 No. 9536 of 2024
- **Bench:** Arun Kumar Singh Deshwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-archana-singh-gautam-v-state-of-u-p-anr-opp-parties-52174
- **Pages:** 4

## Headnote

A. Criminal Law - Negotiable Instrument
Act, 1881 - Section 138, Proviso (a) -
Dishonour
of
cheque
-
Merger
of
Allahabad
Bank
into
Indian
Bank
-
Issuance of cheque after merger - How
far bear valid cheque - Circular was issued
mentioning the fact that all the cheques
issued
by
Allahabad
Bank
can
be
exchanged with the cheques of Indian
Bank by 30.09.2021 - Effect - Cheque
dated 02.06.2023 of erstwhile Allahabad
Bank presented to the Indian Bank on
21.08.2023 was returned on 25.08.2023
with the endorsement "wrongly delivered
not drawn on us" - Liability u/s 138 NI
Act was alleged - Held, the cheque in
question, which was issued from the
account maintained in erstwhile Allahabad
Bank after its merger with Indian Bank,
was not the valid cheque on the date of
presentation - If any invalid cheque is
presented before the Bank and the same
was dishonoured, then no liability under
Section 138 N.I. Act would be attracted -
Dishonouring the invalid cheques after
30.09.2021 will not attract liability u/s
138 N.I. Act - High Court quashed the
proceeding of complaint. (Para 6, 7, 9, 11
and 13)

Application allowed. (E-1)

List of Cases cited:

## Text

6 All. Smt. Archana Singh Gautam Vs. State of U.P. & Anr.
89
(2024) 6 ILRA 89
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 05.06.2024

BEFORE

THE HON'BLE ARUN KUMAR SINGH
DESHWAL, J.

Application u/s 482 No. 9536 of 2024

Smt. Archana Singh Gautam ...Applicant
Versus
State of U.P. & Anr. ...Opp. Parties

Counsel for the Applicant:
Diwakar Tiwari, Gyanendra Singh

Counsel for the Opp. Parties:
Ashish Pandey,G.A., Vivek Kumar Singh

A. Criminal Law - Negotiable Instrument
Act, 1881 - Section 138, Proviso (a) -
Dishonour
of
cheque
-
Merger
of
Allahabad
Bank
into
Indian
Bank
-
Issuance of cheque after merger - How
far bear valid cheque - Circular was issued
mentioning the fact that all the cheques
issued
by
Allahabad
Bank
can
be
exchanged with the cheques of Indian
Bank by 30.09.2021 - Effect - Cheque
dated 02.06.2023 of erstwhile Allahabad
Bank presented to the Indian Bank on
21.08.2023 was returned on 25.08.2023
with the endorsement "wrongly delivered
not drawn on us" - Liability u/s 138 NI
Act was alleged - Held, the cheque in
question, which was issued from the
account maintained in erstwhile Allahabad
Bank after its merger with Indian Bank,
was not the valid cheque on the date of
presentation - If any invalid cheque is
presented before the Bank and the same
was dishonoured, then no liability under
Section 138 N.I. Act would be attracted -
Dishonouring the invalid cheques after
30.09.2021 will not attract liability u/s
138 N.I. Act - High Court quashed the
proceeding of complaint. (Para 6, 7, 9, 11
and 13)

Application allowed. (E-1)

List of Cases cited:

1. NEPC Micon Ltd. Vs Magma Leasing Ltd; (
1999) 4 SCC 253

2. Crl. M.C. No. 1566 of 2023; Sri Premanand
Prusty Vs Smt. Sita Devi (Delhi High Court)

(Delivered by Hon'ble Arun Kumar Singh
Deshwal, J.)

1. Heard learned counsel for the
applicant, learned counsel for the opposite
party no. 2 and Sri Brijesh Kumar Dwivedi,
learned AGA for the State.

2. The present application has been
filed for quashing the entire criminal
proceeding,
including
the
impugned
summoning order dated 15.02.2024 passed
by the learned Special Judicial MagistrateII, Banda in Complaint Case No. 712 of
2023 (Brajesh Kumar Singh Vs. Smt.
Archana Singh Gautam and others), under
Section 138 N.I. Act, 1881, P.S. Kotwali
Nagar, District Banda, pending in the Court
of learned Special Judicial Magistrate-II,
Banda.

3. The counsel for the applicant
contends that the Bank returned the cheque
in question because the cheque was invalid
as the cheque in question was issued from
the account maintained in Allahabad Bank
on 02.06.2023, though the Allahabad Bank
had already merged into the Indian Bank on
01.04.2020,
and
the
cheque
of
the
Allahabad Bank was valid till 30.09.2021;
therefore, on the date of issuance as well as
presentation of the cheque, it was invalid.
Therefore, bouncing, of such the invalid
cheque will not attract the liability u/s 138
N.I. Act.
90 INDIAN LAW REPORTS ALLAHABAD SERIES

4. Per contra, learned counsel for the
opposite party no. 2 has relied upon the
judgment of Hon'ble Apex Court in the
case of NEPC Micon Ltd. V. Magma
Leasing Ltd ( 1999) 4 SCC 253 in the
judgment the Apex Court observed in
paragraph no. 7 that the expression
"insufficient to honour the cheque is a
genus of which the expression" that
account being" is species and paragraph no.
9 of the above judgment the Hon'ble Apex
Court has observed that "the interpretation
which sought for, were given, then it would
only encourage dishonest persons" should
be avoided. On relying on the above
judgment, the counsel for the opposite
party no. 2 has submitted that the invalid
cheque issued by a person is also covered
u/s 138 N.I. Act. He also relied upon the
judgment of Delhi High Court in the case
of Sri Premanand Prusty Vs. Smt. Sita
Devi passed in CRL.M.C. No. 1566 of
2023, in that case the Delhi High Court had
observed that once the signature on the
cheque is not disputed then the cheque if
returned on the ground of its validity then
the prima facie the offence u/s 138 N.I. Act
will be attracted.

5. Learned AGA has also adopted the
argument of counsel for the opposite party
no. 2 and submitted that if the applicant
was aware that the cheque in question has
been declared invalid as the Allahabad
Bank has already been merged into Indian
Bank then just to cheat the opposite party
no. 2, he had issued this cheque; therefore,
the offence u/s 138 N.I. Act, will be
attracted.

6. After hearing the rival submission
of the counsel for the parties and perused
the record, it is clear that the Allahabad
Bank had merged into the Indian Bank on
01.04.2020. Thereafter, a wide circular was
made by the Indian Bank in newspapers
mentioning the fact that all the cheques
issued
by
Allahabad
Bank
can
be
exchanged with the cheques of Indian Bank
by 30.09.2021, and the cheque from
Allahabad Bank will be honoured by
30.09.2021. Therefore, the cheque issued
by the Allahabad Bank was valid till
30.09.2021, and all the cheques of
Allahabad Bank which were presented
before the Indian Bank till 30.09.2021,
were honoured by the Indian Bank, and
after 30.09.2021, cheques issued from the
account maintained by the erstwhile
Allahabad Bank were declared invalid for
honouring. Section 138 N.I. Act prescribes
the condition for initiation of proceeding on
bouncing the cheque in the proviso (a) of
Section 138 N.I. Act. As per the proviso (a)
of Section 138 N.I. Act, cheque must be
presented to the Bank during its validity.
Section 138 N.I. Act is being quoted as
under:-

"138. Dishonour of cheque for
insufficiency,
etc.,
of
funds
in
the
account.-Where any cheque drawn by a
person on an account maintained by him
with a banker for payment of any amount of
money to another person from out of that
account for the discharge, in whole or in
part, of any debt or other liability, is
returned by the Bank unpaid, either
because of the amount of money standing to
the credit of that account is insufficient to
honour the cheque or that it exceeds the
amount arranged to be paid from that
account by an agreement made with that
Bank, such person shall be deemed to have
committed an offence and shall, without
prejudice to any other provision of this Act,
be punished with imprisonment for [a term
which may be extended to two years'], or
with fine which may extend to twice the
amount of the cheque, or with both:
6 All. Smt. Archana Singh Gautam Vs. State of U.P. & Anr.
91
Provided that nothing contained in this
section shall apply unless-

(a) the cheque has been presented
to the Bank within a period of six months
from the date on which it is drawn or
within the period of its validity, whichever
is earlier;

(b) the payee or the holder in due
course of the cheque, as the case may be,
makes a demand for the payment of the
said amount of money by giving a notice; in
writing, to the drawer of the cheque,
[within thirty days] of the receipt of
information
by
him
from
the
Bank
regarding the return of the cheque as
unpaid; and

(c) the drawer of such cheque
fails to make the payment of the said
amount of money to the payee or, as the
case may be, to the holder in due course of
the cheque, within fifteen days of the
receipt of the said notice."

7. From the perusal of Section 138
N.I. Act, it is clear that if any invalid
cheque is presented before the Bank and
the same was dishonoured, then there is no
liability under Section 138 N.I. Act would
be attracted, and the cheque of Allahabad
Bank is invalid after 30.09.2021 after
merging the Allahabad Bank into the Indian
Bank
on
01.04.2020.
Therefore,
dishonouring
such
cheques
after
30.09.2021 will not attract liability u/s 138
N.I. Act.

8. It is also relevant to mention here
that as per Section 118 (b) of N.I. Act a
cheque shall be deemed to be drawn on the
date which is mentioned in the cheque even
if same may post dated.

9. In the present case, a cheque dated
02.06.2023 of erstwhile Allahabad Bank
was presented to the Indian Bank on
21.08.2023, and the same was returned on
25.08.2023 with the endorsement "wrongly
delivered not drawn on us". Therefore, the
cheque in question was invalid on the date
of presentation before the Indian Bank.

10. So far as the judgment of NEPC
Micon Ltd. (Supra) relied upon by the
counsel for the opposite party No. 2 is
concerned, that judgment relates to the
different kinds of reasons for dishonouring
the cheque that would come under the
category of insufficient funds, but in the
present case, the question is not simply the
reason for dishonouring the cheque, but the
question is validity of the cheque as
mentioned in proviso (a) of Section 138 of
N.I. Act because if the cheque itself is
invalid, then the Bank is bound to
dishonour the same. So far as the judgment
of the Delhi High Court in Sri Premanand
Prusty (Supra) relied upon the counsel for
the opposite party no. 2 is concerned, this
Court is of the view that this judgment has
not been correctly decided.

11. In view of the above analysis, the
cheque in question, which was issued from
the
account
maintained
in
erstwhile
Allahabad Bank after its merger with
Indian Bank, was not the valid cheque on
the date of presentation before the Indian
Bank as required by proviso (a) of Section
138 of N.I. Act; therefore, dishonouring the
same will not attract the liability u/s 138
N.I. Act.

12. This Court is also of the view that
the above analogy will also be applicable to
the cheques of all banks which had merged
with other banks.
92 INDIAN LAW REPORTS ALLAHABAD SERIES

13. Therefore, the present application
is
allowed
and
the
proceeding
of
Complaint Case No. 712 of 2023 (Brajesh
Kumar Singh Vs. Smt. Archana Singh
Gautam and others), under section 138 N.I.
Act, pending in the Court of Learned
Special Judicial Magistrate-II, Banda, is
hereby quashed.
----------
(2024) 6 ILRA 92
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 05.06.2024

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Crl. Misc. Bail Application No. 3604 of 2024

Vimal Rajput ...Applicant
Versus
State of U.P. ...Respondent

Counsel for the Applicant:
Sumeet Tahilramani

Counsel for the Respondent:
G.A.

A. Criminal Law - Criminal Procedure
Code,1973 - Section 439 - Bail - High
Court's' power - Narcotic Drugs and
Psychotropic Substances Act, 1985 - Ss.
36-A and 37 - S. 37 of the NDPS Act, does
not contain any provision saving the
special powers to grant bail conferred
upon the High Courts by Section 439 Cr.
P.C. - How far effect High Court's power
to grant bail - Held, the restrictions
contained in Section 37 of the NDPS Act
were meant to be applicable to Courts
other than the Constitutional Courts and
in view of the provision contained in
Section 36-A (3) of NDPS Act, those
restrictions
do
not
apply
to
the
Constitutional Courts. (Para 12 and 30)

B. Criminal Law - Narcotic Drugs and
Psychotropic Substances Act, 1985 -
Section
52-A
-
Narcotic
Drugs
and
Psychotropic
Substances
(Seizure,
Storage, Sampling and Disposal), Rules,
2022 - Rules 3(2) and 10 - Samples
were not drawn in presence of a
Magistrate - Non serial numbering of
packets
for
the
purposes
of
identification - Though 14 packets were
claimed to be seized, but sample has
been drawn from only one packet -
Effect - Held, the authorities themselves
have violated the mandatory provisions
contained in Rules of 2022 - High Court
found case for enlargement of applicant
on bail. (Para 38, 39, 41 and 42)

C. Interpretation of Statute - Harmonious
construction - Defect in the statutory
provision - Possibility of correction to be
done by the court - Held, if the makers of
the Act had themselves come across this
jumbling of the provisions in Sections 36A and 37 due to a copy-paste error, they
have surely have straightened it out by
reading Section 36-A(3) and Section 37 in
conjunction with each other - Therefore,
in order to correct the defect without
altering the provisions of the Statute, the
provisions of Sections 36-A and 37 have to
be
read
together
and
interpreted
harmoniously so that Section 36-A(3)
does not become redundant or otiose.
(Para 28)

Bail Application allowed. (E-1)

List of Cases cited:

1. S.L.P. Crl. No. 8137 of 2022; State by the
Inspector of Police Vs B. Ramu; 2024 INSC 114
decided on 12.02.2024

2. U.O.I. Vs Ajay Kumar Singh, 2023 SCC
OnLine SC 346

3. Mohd. Muslim Vs State (NCT of Delhi); 2023
SCC OnLine SC 352

4. Ramji Singh Vs Enforcement Directorate;
2023 SCC OnLine All 831

5. Vijay Madanlal Choudhary Vs U.O.I.; 2022
SCC OnLine SC 929