Cheque dishonour on account closure attracts Section 138 liability; closing the account does not defeat the drawer's responsibility.

Dishonour of a cheque after the drawer closes the bank account still attracts liability under Section 138 of the Negotiable Instruments Act. The provision applies where a cheque is issued in discharge of a debt or liability, presented for payment, dishonoured, notice is served, and payment is not made within the statutory period; the precise reason for dishonour is not decisive. Closing the account before or after issuance does not take the case outside the statute, because such conduct falls within the mischief the provision is designed to prevent and preserves the credibility of cheque-based commercial transactions. The drawer remains liable.

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Issues: (i) Whether dishonour of a cheque on the ground that the drawer had closed the bank account before presentation attracts liability under Section 138 of the Negotiable Instruments Act.

Analysis: The liability under Section 138 turns on the drawing of a cheque in discharge of a debt or liability, its dishonour on presentation, the service of notice, and failure to pay within the statutory period. The reason for dishonour is not decisive, and the section is intended to prevent misuse of cheque facilities and to preserve the credibility of commercial transactions. Closure of the account before or after issuance does not take the case outside the statute, because such conduct is itself within the mischief the provision seeks to curb. The banking law position also shows that cheque facilities are tied to an account relationship, and closing the account cannot be used to defeat the drawer's liability after issuing a cheque.

Conclusion: Dishonour of a cheque due to closure of the account does attract Section 138, and the drawer remains liable.

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