The answer to the above questions is yes. If drawer’s signature differs or mismatch with the specimen which is available on the bank record and due to this reason said cheque, not encash but dishonored for the reason that the Drawer’s Signature differs, It shall be a punishable offense and Attract to the criminal proceedings as well as if other ingredients of the offence are satisfied like Insufficient of Fund, stop payment, account closed, which are criminal offence Under section 138 of the Negotiable Instrument Act.
In the case of A.K.Gopalakrishnan Nair vs T.i.Radhamma at the Kerala High Court Honourable Mr. Justice B.Kemal Pasha observed that, Can the dishonour of a cheque issued by the drawer by affixing his/her old signature after the change of his/her signature and intimation of such change to the bank, whatever be the reason shown by the banker for its dishonour, invite an offence under Section 138 of the Negotiable Instruments Act?
2. This appeal on special leave has been preferred by the complainant in C.C.No.477 of 2006 of the Chief Judicial Magistrate’s Court, Alappuzha, challenging the judgment of acquittal passed by the court below under Section 255 (1) of the Code of Criminal Procedure.
3. The case before the court below is, as a result of a private complainant filed by the appellant herein as complainant, against the first respondent herein as accused, alleging an offence punishable under Section 138 of the Negotiable Instruments Act.
4. The case of the appellant is that the first respondent had borrowed an amount of `.62,000/- from him for her business purpose on 10.03.2006 and, in discharge of the said liability, issued Exhibit P1 post dated cheque to him. When the appellant presented Exhibit P1, it returned dishonoured with the dictum ‘account closed’. A notice as contemplated under Section 138(b) of the Negotiable Instruments Act was caused to be issued at the instance of the appellant to the first respondent. According to the appellant, she accepted the notice by affixing a false signature and did not care to repay the amount and also did not care to send any reply.
5. On the side of the complainant, PWs 1 to 3 were examined before the court below and Exhibits P1 to P5 were marked. On the side of the first respondent, DW1 was examined and Exhibits D1 to D4 were marked. The court below came to the conclusion that the cheque, even though dishonoured with the dictum ‘account closed’, could not have honoured the cheque even in case where the availability of sufficient funds in the account and account was alive, for the reason that the signature contained in Exhibit P1 cheque was the old signature of the first respondent, which was subsequently changed by her through Exhibit D1 gazette notification, which fact was also duly informed to the bank. According to the court below, therefore, the dishonour of Exhibit P1 cheque could not be sufficient to invite the offence under Section 138 of the Negotiable Instruments Act and on that ground alone, the first respondent was acquitted through the impugned judgment.
6. Heard the learned counsel for the appellant and the learned counsel for the first respondent. It is true that Exhibit P1 cheque was dishonoured by the bank through Exhibit P2 dishonour memo with the dictum ‘account closed’. It is trite that even when the account is closed after the issuance of a cheque or even prior to the issuance of a cheque, the offence under Section 138 of the Negotiable Instruments Act can be attracted, provided other ingredients of the offence are there. The crucial aspect is that whether there was sufficient funds in the accounts of the accused to honour the cheque at the time when the cheque was presented. When the account is closed, the same has to be considered as equal to the absence of any funds in the accounts of the accused to honour the cheque.
7. In this particular case, it seems that Exhibit P1 cheque contains the old signature of the first accused. It has come out in evidence that she had changed her signature through Exhibit D1 gazette notification with effect from 24.06.2003. It is the case of the first respondent that a blank signed cheque leaf was issued by her to the appellant prior to 24.06.2003 relating to a money transaction between her and the appellant. She had admitted that an amount of `50,000/- was borrowed by her from the appellant in the year 2002, which she had repaid subsequently. According to her, the signed cheque leaf which was obtained by the appellant from her as security was not returned, and the same has been altered and misused as Exhibit P1.
8. Exhibit D3 is the copy of cheque dated 21.08.2001 issued by the first respondent from her accounts, which contains her old signature. Likewise, Exhibit D4 is the copy of cheque dated 22.08.2004 issued by the first respondent, which contains her present signature after the signature was changed though Exhibit D1. It seems that the bank had honoured both the said cheques and accepted the said cheques. Even though Exhibit P1 cheque has been dishonoured with the dictum ‘account closed’, it has to be taken note of the fact that it could have been dishonoured with the dictum ‘signature do not match’ or for the reason that ‘it contains a different signature’.
9. According to the appellant, he was deliberately defrauded and cheated by the first respondent by issuing Exhibit P1 cheque and affixing her old signature deliberately in it, with a view to getting it dishonoured for the reason that the signature differs. It seems that the account was closed on 28.02.2006. Let us take a case wherein Exhibit P1 cheque happened to be dishonoured for the reason that ‘drawer’s signature incomplete/illegible/differs/required’. When the signature of the first respondent was changed and the fact was intimated to the bank, the bank has to accept the changed signature of the first respondent as her correct signature. In such case, when a cheque containing her old signature comes for collection after such change of signature and the intimation to the bank, and when such cheque bears a date after the date of change of the signature, the bank ought to have dishonoured the said cheque with the dictum ‘drawer’s signature differs’. Whatever it is, the crux of the matter is whether there were amounts in the accounts of the accused to honour the cheque on presentation. Even when the signature differs, if there were no sufficient amounts in the accounts of the accused to honour the cheque, an offence under Section 138 of the Negotiable Instruments Act can be made out.
10. The learned counsel for the appellant has relied on the decision of the Karnataka High Court in Dinesh Harakchand Sankla v. Kurlon Ltd. [2006(2) KLT 733], wherein it was held that the offence under Section 138 of the Negotiable Instruments Act will lie even in a case where the cheque is dishonoured for ‘alteration in the drawer’s signature’ or the ‘drawer’s signature differs’. The learned counsel for the appellant has also relied on the decision in Laxmi Dyechem v. State of Gujarat 2013 (1) KLT 167 (SC), wherein it was held that if a cheque is dishonoured on the ground that ‘signatures do not match’, it too implies that the specimen signatures do not match the signature on the cheque and it would constitute ‘dishonour’ within the meaning of Section 138 of the Negotiable Instruments Act. It was also held that if, after the issuance of the cheque, the drawer closes the account, it must be presumed that the amount in the account was nil and hence insufficient to meet the demand of the cheque. It was held in Laxmi Dyechem’s case (Supra) that: “For instance this Court has held that if after issue of the cheque the drawer closes the account it must be presumed that the amount in the account was nil hence insufficient to meet the demand of the cheque. A similar result can be brought about by the drawer changing his specimen signature given to the bank or in the case of a company by the company changing the mandate of those authorised to sign the cheques on its behalf. Such changes or alteration in the mandate may be dishonest or fraudulent and that would inevitably result in dishonour of all cheques signed by the previously authorised signatories. There is in our view no qualitative difference between a situation where the dishonour takes place on account of the substitution by a new set of authorised signatories resulting in the dishonour of the cheques already issued and another situation in which the drawer of the cheque changes his own signatures or closes the account or issues instructions to the bank not to make the payment. So long as the change is brought about with a view to preventing the cheque being honoured the dishonour would become an offence under S.138 subject to other conditions prescribed being satisfied.”
11. From what is discussed above, it has clearly come out that in this particular case also the offence under Section 138 of the Negotiable Instruments Act has been clearly made out by the appellant. The court below was carried away in finding that an offence under Section 138 of the Negotiable Instruments Act will not lie in this case. It seems that the court below has found all the other ingredients to invite the offence under Section 138 of the Negotiable Instruments Act in favour of the appellant. On going through the evidence, I am satisfied that the acquittal of the first respondent, through the impugned judgment has resulted in substantial miscarriage of justice. The acquittal is as a result of total misconception of the legal aspect in the matter. From the evidence, I am satisfied that the first respondent is guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, and therefore, the impugned judgment is liable to be reversed.
12. Regarding the sentence, the learned counsel for the first respondent has pointed out that the first respondent is in a pitiable stage as she is laid up. It is also pointed out that her business failed and her child is paralytic. Considering the circumstances pointed out by the learned counsel for the first respondent, I am of the view that a sentence of imprisonment till the rising of court and to deposit an amount of `62,000/- as compensation to the appellant under Section 357(3) of the Code of Criminal Procedure, within three months from today, in default, to undergo simple imprisonment for one month, will meet the ends of justice in this case. In the result, this appeal is allowed and the impugned judgment is reversed. The first respondent is found guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, and is convicted thereunder, and is sentenced to undergo imprisonment till the rising of court and to deposit an amount of `62,000/- as compensation to the appellant under Section 357(3) of the Code of Criminal Procedure within three months from today, in default, to undergo simple imprisonment for one month. The first respondent shall appear before the Chief Judicial Magistrate’s Court, Alappuzha on 02.12.2013. It is also ordered that the filing of a memo by the appellant before the court below stating that he has received the amount, shall be treated as proof of payment of compensation and in such case, it should be treated as a valid discharge.