Cheque dishonour after account closure can still attract Section 138 where the account existed when the cheque was issued.

Closure of the drawer's bank account before presentation does not, by itself, take a dishonoured cheque outside Section 138 of the Negotiable Instruments Act, 1881, because the provision covers a cheque drawn on an account that existed when issued but was later closed so it could not be honoured. The object of the section is to preserve cheque credibility and prevent drawers from defeating payment by closing accounts after issuing cheques. The presumption under Section 118(b) as to the date of drawing is rebuttable and does not conclusively fix the cheque date as the drawing date. On the admitted facts, the cheque was post-dated and could still have been issued when the account was live, so quashing was declined.

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Issues: Whether dishonour of a cheque on the ground that the drawer had closed the account before presentation attracts Section 138 of the Negotiable Instruments Act, 1881, and whether the presumption as to the date of drawing of a post-dated cheque defeats such liability.

Analysis: A cheque is necessarily drawn on an existing account maintained by the drawer. The expression referring to insufficiency in "that account" covers a situation where the drawer had maintained an account when the cheque was issued but later closed it before presentation, because such closure effectively renders the account incapable of honouring the cheque. The statutory object behind Section 138 is to enhance the credibility of cheques and prevent drawers from defeating payment by closing accounts after issuing cheques. The presumption under Section 118(b) is only a rule of evidence and is rebuttable; it does not conclusively fix the date of drawing as the date borne on the cheque. On the admitted facts, the cheque was post-dated and had been issued earlier, so the complainant could still establish that the drawer had a live account when the cheque was drawn.

Conclusion: Yes. Dishonour on the ground of account closure can fall within Section 138, and the petition for quashing on that ground fails.

Ratio Decidendi: Closure of the drawer's bank account before presentation of a cheque does not take the case outside Section 138 where the account existed when the cheque was drawn, and the presumption regarding the date of drawing is rebuttable.

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