Stop-payment dishonour with sufficient funds falls outside Section 138 prosecution under the Negotiable Instruments Act.

Section 138 of the Negotiable Instruments Act is not attracted where cheque dishonour follows a stop-payment instruction and the drawer's account had sufficient funds at presentation. The legal foundation for prosecution under Section 138 requires dishonour for insufficiency of funds or because the amount exceeds the arrangement with the bank; where bank records show adequate balance and the return is attributable to stop payment, that statutory ingredient is absent. On that basis, the complaint was quashed as not maintainable.

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Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 could be sustained where the cheques were returned unpaid pursuant to a stop-payment instruction and the account had sufficient funds.

Analysis: Section 138 is attracted where a cheque is dishonoured for insufficiency of funds or where the amount exceeds the arrangement with the bank. The Court noted that the cheque had been returned after the drawer had instructed the bank to stop payment, and the bank communication showed that sufficient balance was available when the cheques were presented. In those circumstances, the dishonour was not on account of insufficiency of funds. The Court therefore held that the factual foundation for the prosecution under Section 138 was absent.

Conclusion: The complaint under Section 138 was not maintainable and was quashed.

Ratio Decidendi: A prosecution under Section 138 of the Negotiable Instruments Act, 1881 cannot be sustained when the cheque is dishonoured after a stop-payment instruction and the evidence shows that sufficient funds were available in the drawer's account at the time of presentation.

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