Frozen bank account defeats Section 138 cheque dishonour proceedings when dishonour is due to account blockage.

Proceedings under Section 138 of the Negotiable Instruments Act were unsustainable where the cheque was dishonoured because the drawer's bank account had been frozen by an Income Tax Department attachment order before presentation. Dishonour memos and bank evidence recorded the reason as "account blocked," and once the account was frozen the drawer could not operate it or give effective banking instructions. On those facts, the account could not be treated as one maintained for the purposes of Section 138, and the statutory ingredients of the offence were not met. The cheque complaint was therefore not maintainable and the proceedings were liable to be quashed.

---

---

Issues: Whether proceedings under Section 138 of the Negotiable Instruments Act, 1881 could be sustained when the cheque was dishonoured because the drawer's bank account had been frozen by an order of the Income Tax Department.

Analysis: Liability under Section 138 arises only when a cheque drawn on an account maintained by the drawer is returned unpaid for the statutory reasons, namely insufficiency of funds or the cheque exceeding the arrangement with the bank. The material on record showed that the dishonour memo recorded the reason as "account blocked", the bank official supported that endorsement, and the attachment order of the Income Tax Department had frozen the account before presentation of the cheque. Once the account was frozen, the drawer was unable to operate it or issue effective instructions to the bank, so it could not be treated as an account maintained for the purpose of Section 138. On those facts, the dishonour did not satisfy the statutory ingredients of the offence.

Conclusion: The cheque dishonour complaint under Section 138 of the Negotiable Instruments Act, 1881 was not maintainable on these facts and the proceedings were liable to be quashed in favour of the petitioners.

Ratio Decidendi: Where a bank account is frozen or attached by a competent authority before presentation of the cheque, and the drawer is thereby disabled from operating the account, dishonour on that ground does not fulfil the statutory ingredients of Section 138 of the Negotiable Instruments Act, 1881.

---