Cheque Bounce Complaint Maintainable Despite Freezing Of Account By ED/ IT Dept If Complainant Establishes 'Insufficiency Of Funds': Madras HC

The Madras High Court ruled that a cheque bounce complaint under Section 138 of the Negotiable Instruments Act is maintainable even if the account is frozen by the Enforcement Department or Income Tax Department. Justice G. Jayachandran observed that the complainant must prove that the account lacked sufficient funds to honor the cheque, regardless of the freezing. The court relied on the Supreme Court’s decision in Laxmi Dyechem v. State of Gujarat, emphasizing that issuing a cheque without sufficient funds constitutes the crime. The court also held that a single complaint for dishonor of multiple cheques presented and returned on the same day is maintainable. The case involved M/s Challani Rank Jewellery, which issued 36 cheques to discharge a debt. The petitioner argued that the account had sufficient funds but was blocked by the Income Tax Department and ED. The court dismissed this defense, upholding the complaint’s validity.