High Court quashes case under Section 138 due to bank instructions. Follow bank rules to avoid legal abuse.

The High Court quashed the proceedings in C.C.No.5476 of 2016 under Section 138 of the Negotiable Instrument Act. The Court found that the cheque was not dishonored due to lack of funds or payment stoppage but for further action required by the bank. Emphasizing the need to follow bank instructions before initiating legal action, the Court held that the respondent's failure to clarify with the bank before filing the complaint constituted an abuse of court process. The judgment highlighted the importance of complying with bank instructions to prevent misuse of legal remedies under Section 138.

---

---

Issues:
Quashing of proceedings in C.C.No.5476 of 2016 under Section 138 of the Negotiable Instrument Act.

Analysis:
The petition sought to quash the proceedings in C.C.No.5476 of 2016, involving an offence under Section 138 of the Negotiable Instrument Act. The complaint alleged that a cheque was returned with an endorsement to contact the Drawer - Drawee Bank and present it again. The petitioner argued that this did not amount to dishonoring the cheque for want of funds or payment stoppage, and the respondent should have clarified with the bank before filing the complaint. The petitioner contended that such actions amounted to an abuse of the court process, invoking the jurisdiction under Section 482 of Cr.P.C.

The respondent did not appear, leading the Court to proceed with the case. The main contention raised by the petitioner was that the cheque was returned with specific instructions to contact the bank and re-present it. The Court acknowledged that the Supreme Court held complaints under Section 138 could be maintained regardless of the reason for cheque return. However, in this case, the cheque was not dishonored due to a defect but for further action by the bank. The Court opined that the respondent should have followed the bank's instructions before filing the complaint, as failure to do so did not constitute cheque dishonor. Consequently, the Court found the lower court erred in taking cognizance of the complaint.

As a result, the High Court quashed the proceedings in C.C.No.5476 of 2016, allowing the Criminal Original Petition. The judgment emphasized the importance of complying with bank instructions before initiating legal action under Section 138 of the Negotiable Instrument Act to prevent abuse of court processes.

---