Cheque dishonour from a blocked or frozen account does not attract liability under the Negotiable Instruments Act.

A cheque returned unpaid because the bank account was blocked or frozen pursuant to a statutory authority's directions does not, by itself, satisfy the statutory ingredients of cheque dishonour liability. Section 138 applies only where the dishonour is for insufficiency of funds or because the payment exceeds the arrangement with the bank. As the return memos and the complainant's notice showed a blocked or frozen account as the reason for dishonour, the Metropolitan Magistrate's acquittal called for no interference and leave to appeal was refused.

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Issues: Whether dishonour of cheques on the ground that the account was blocked or frozen attracts liability under Section 138 of the Negotiable Instruments Act, 1881, and whether leave to appeal against acquittal should be granted.

Analysis: Section 138 is attracted only when a cheque is returned unpaid because the account lacks sufficient funds or because the amount exceeds the arrangement made with the bank. The return memos and the complainant's own notice showed that the cheques were returned because the account was blocked or frozen pursuant to directions of a statutory authority. That reason did not satisfy the statutory ingredients of Section 138, and the acquittal recorded by the Metropolitan Magistrate called for no interference.

Conclusion: The dishonour of the cheques on account of a blocked or frozen account did not constitute an offence under Section 138, and leave to appeal was refused.

Final Conclusion: The petitions challenging acquittal failed because the statutory basis for prosecution under the cheque dishonour provision was not made out.

Ratio Decidendi: A cheque returned unpaid because the account was blocked or frozen does not, by that reason alone, satisfy the statutory conditions for an offence under Section 138 of the Negotiable Instruments Act, 1881.

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