Promissory Note–It is an instrument in writing (not being a bank–note or a currency–note) containing an unconditional undertaking, signed by the maker, to pay on demand or at a fixed or determinable further time a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.
Sonali Bank vs Hare Krishna Das 49 DLR 282.

The cheque drawn by the accused petitioner on the bank account is not maintained in her name rather it is maintained in the name of her husband. For the purpose of Section 138(1) of the Act, the account has to be maintained by the drawer of the cheque. The liability or debt of the husband cannot be thrust on to the shoulder of the wife, the accused-petitioner. The impugned proceeding is quashed. Shahnaj Begum Munni. -Vs-The State 1 ALR (HCD) 56.

Section 13 of the Negotiable Instrument Act 1881 which has defined "Negotiable Instrument" has not made any distinction between "crossed cheque account payee" or "post-dated cheque given as a security for repayment of the loan" or " any other cheque issued by the drawer for encashment currently" or cheque of other kinds such as "bearer cheque" as ordinarily mean. Tipu Sultan - Vs. - The State 6 ALR 2015(2)190.

From reading of section 48 of the Act we do not find that institution of this case under Penal Code is barred under section 48 of the Act by an explicit provision of this Act.
Salahuddin (Md) and others vs State 51 DLR 299.

A duty is cast upon a banker, before opening a new account of a customer to adhere to the rules and practices prevailing with regard thereto. And especially as a collecting bank it should take into consi-deration the state of the account to make sure that it is free from doubt. The central bank itself found irregularity with opening of the account and asked the defendant by a letter to refund the proceeds collected against the forged cheques. With the proven fact that the cheques are forged, recipient of the forged cheques is althrough untraced and the address given is false, the conduct of the Defendant-Appellant with its fellow banker does not seem to conform the law, practices and tradition of banking business. The defendant cannot escape its liability to pay back the money collected by it against cheques found forged. The impugned judgment and decree passed by the trial court is hereby affirmed.
Islami Bank Bangladesh Ltd. vs Agrani Bank 16 BLC 150.

Code of Criminal Procedure [V of 1898]
Section 344 read with
Negotiable Instruments Act [XXVI of 1881]
Section 138 read with
Arbitration Act [I of 2001]
Section 12
Arbitration proceedings, which is of civil nature, private rights and obligations of the respective contending parties are determined including recovery of money by way of damages for the loss caused by cheques, if any, cause of action so has arisen under section 138 of the Act and under section 12 of the Arbitration Act are altogether distinct having different entailment/consequence, as such criminal proceedings cannot be stayed.
The High Court Division held that in the instant case, pursuant to business transaction the accused petitioner entered into respective agreements with the complainant opposite party to sell agricultural products locally which were imported by the said complainant. During the course of business the accused petitioner issued 4 (four) post dated cheques in question, which were ultimately dishonoured by the drawee bank with the remark “payment stopped by drawer”. In this regard, the categorical assertion of the opposite party is that vide clause 3.4 of the agreement the opposite party company can take any legal action against the petitioner under the Act of 1881 if the cheques are dishonoured for any reason whatsoever. As such, merely because there is arbitration proceeding pending under section 12 of the arbitration in between the contending parties the proceeding under section 138 of the Act cannot be stayed. Mushfequr Rahman -Vs.- The State (Criminal) 2019 ALR (HCD) Online 155 ....View Full Judgment

A plain reading of subsection (1) of the Section 138 of the Act, 1881 shows that an offence under this section shall be deemed to have been committed, the moment a cheque drawn by a person on an account maintained by him with a bank for payment of any amount of money to another person from out of that account is bounced by the bank unpaid on any of the grounds mentioned therein. Sub-section (1) of section 138 has not made any qualification of the cheque so returned unpaid either post dated given as a security for repayment of the money as alleged by the accused or any other cheque issued by the drawer from encashment currently. The legislature has not made any difference between a post dated cheque issued as security and a cheque issued for encashment currently. I do not see any scope of making any such difference. …Md. Zakir Hussain Vs. Md. Jalal Khan and another, 1 SCOB [2015] HCD 52 ....View Full Judgment

Secondly, if the Magistrate takes cognizance and issues summons against the accused-director despite non-making clearer description about the responsibility of the said accused-director, then, as per the Indian Supreme Court’s view, the order of issuance of summons is liable to be quashed. But nothing has been said by the Indian Supreme Court about the next step available for the complainant, given that the offence under Section 138 of the NI Act having been duly constituted remains intact following quashing the Magistrate’s Order of issuance of summon/warrant. When an accused is discharged from or acquitted of the accusation of a criminal charge by a trial Court, the status of a criminal offence becomes non-est. Also, when a criminal case is quashed by this Court on the ground of non-disclosure of any offence, irrespective of the said case’s stage - be it at the investigation stage or trial or post-trial stage, the offence is wiped out. But, if a criminal case is quashed merely on the ground of procedural illegality, be it happens after completion of its trial or during trial or at the investigation stage, the High Court Division’s duty is to express its view as to what would be the next step for the informant/complainant following quashment of the impugned order/proceedings. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

Whether a criminal case under Section 138 read with Section 140 NI act is liable to be quashed on the ground of non-impleadment of the company.
If the offence under Section 138 of the NI Act have been duly constituted and the case was filed within time against the signatory of the cheque and/or the directors and/or the officers of the company, in that scenario, the case shall not fail for non-mentioning of the name of the company in the petition of complaint, subject to the condition that the charge must be framed against the company and, on behalf of the company, the members of the BoD shall answer the charge. The rationale behind is that had the company been arrayed as the accused, it was the director/s of the company who had to face the trial by answering the charge/s framed against the company. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

Guidelines for the Magistrates who are assigned to take cognizance of the offence under Sections 138 and 140 NI Act.
No complaint-petition under Section 138 read with Section 140 of the NI Act shall be entertained by a Magistrate unless the following conditions are fulfilled.
(i) The company must be named in the petition of complaint as the No. 1 accused.
(ii) The signatory of the cheque shall be made accused No. 2 in the petition of complaint.
(iii) If any director is arraigned as accused, the nature of responsibility of the said director with her/his designation/portfolio in the company must be made clearly.
(iv) The petition of complaint must contain a statement to the effect that the accused-director/s are in charge of, and responsible to, the company for the conduct of the business of the company.
(v) A copy of the Articles & Memorandum of Association and a copy of the Form XII of the accused-company must be annexed to the petition of complaint so as to satisfy the Magistrate that the accused-director/s are in charge of the company at the material time of issuance/dishonoring of the cheque.
(vi) Evidence must be enclosed to the complaint-petition to substantiate the fact that notice under clause (b) to Section 138(1) of the NI Act has been served in any of the three manners enshrined in Section 138 (IA) of the NI Act.
(vii) A copy of the reply, if any, to the demand/legal notice for payment of the cheque-amount must be produced before the Magistrate.
(viii) If the complainant claims that s/he has not received any reply to the demand/legal notice, in that scenario, there must be a clearer statement in the complaint-petition about its non-receipt.
(2) The Magistrate must not hesitate to ask the complainant to come back with fresh application containing the above-noted statements together with the aforesaid annexures/documents.
(3) If the Magistrate finds it to be an appropriate case to carry out a judicial enquiry about the nature of responsibility of the accused-director before taking cognizance, the Magistrate should take necessary step/s for heading towards judicial enquiry.
4) The Magistrate should follow the above directives in addition to the guide-lines laid down in the case of Aleya Vs State 70 DLR 303 (Para-26). Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) On-line 230 ....View Full Judgment

Taking cognizance of “deemed guilt” and “proved guilt” as provided in Section 140 NI Act.
Although Section 140 of the NI Act, as a whole, speaks about three categories of accused persons, namely, (1) the company, (ii) every person who was in charge of, and responsible to, the accused-company at the time of commission of offence and (iii) any director, manager, secretary or other officer of the accused-company who has consented to, or connived with, commission of any offence under the NI Act, including the of¬fence under Section 138 of the Act, however, only the first two categories of the persons namely, (i) the company and (ii) every persons who are in charge of, and responsible to, the company, may be proceeded against on the basis of their ‘deemed guilt’; and in order to proceed against the third category of person/s, a ‘proved guilt’ is required. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

When the offence is committed by a company, the ‘deemed guilt’ is primarily attached to the members of the BoD in addition to the signatory of the cheque and the company inasmuch as after dishonouring of a cheque issued by a company, when the said company decides not to pay off the cheque-amount despite receiving demand/legal notice, the said decision is to be seen and taken as a serious business of the company and for the said type of conduct of business of the company, it is quite commonsensical to deem that all the members of the BoD jointly and individually were aware of the said decision having foreseen its legal consequence and, thereby, they are to be deemed to be guilty for non-payment of the cheque amount. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

Reasons for impleading the directors of the company in a case under Section 138 read with Section 140 NI Act. Company is a juristic person and its Board of Directors acts as its body and mind. All the powers of management of the affairs of the company are vested in the BoD and, thus, the Board becomes the working organ of the company. The BoD is, therefore, considered to be the company’s supreme authority which consists of the directors of the company. That is how, the directors remain responsible for the company’s management, which includes taking/making loan and repayment thereof. For this reason, it is fairly reasonable for a person, who is having a transaction with a company, to presume that the directors of the company are in charge of the affairs of the company. If any restrictions of their powers are placed by the Memorandum or Articles of the company, it is for the directors to establish it at the trial. It is in that context that Section 140 of the NI Act provides that when the offender is a company, every person, who at the time when the of-fence was committed was in charge of and was responsible to the company for the conduct of the business of the company, shall also be deemed to be guilty of the of-fence along with the company. Therefore, when simply an allegation in the com¬plaint would be made stating that the named accuseds are directors of the company, it would usher in the element of their acting for and on behalf of the company and of their being in charge of the company. In other words, the requirement of disclosing an offence against an accused-director of a company, in the cheque-dishonouring criminal cases, is to be taken to have been fulfilled by the complainant if the names of the directors are mentioned in the column of the accused and the supporting documents as to holding the post of director, such as the Articles & Memorandum of Association and Form XII of the accused-company, are annexed to the complaint-petition. It leads us to hold that since a company, being a juristic person, operates through the BoD consisting of the Chairman, Managing Director, Joint/Deputy Managing Director and other Directors, the members of the BoD normally be impleaded as accused for their ‘deemed guilt’ along with the company when there arises an occasion by anybody to file a criminal case against the company. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

Negotiable Instruments Act [XXVI of 1881]
Sections 138 and 140 read with
Code of Criminal Procedure [V of 1898]
Section 200
Way-out for a director of the company to delist his/her name from the category of the accused. Without facing rigour of trial of such an accusation, there is a way-out for a director of a company to obliterate her/his name from the list of the accused-person if s/he had specifically denied the liability of dishonouring the cheque by replying to the demand/legal notice upon enclosing the corroborating-papers/documents therewith in substantiating her aforesaid denial. Usually, upon receipt of the petition of complaint under Section 138 of the NI Act, the Magistrate would decide to take cognizance on the basis of averments made in the petition of complaint, statements recorded under Section 200 of the CrPC and the annexed papers, which include the dishonoured-cheque, bank-slip containing information as to dishonouring the cheque, the demand/legal notice with hand-acknowledgment/registered receipt or notification in the daily national newspaper and the reply to the demand/legal notice. When a Magistrate would have the opportunity to peruse the reply to the demand/legal notice containing specific denial by a director as to absence of her/his knowledge about issuance/ dishonouring of the cheque or her/his resignation from the company be-fore issuance of the cheque, the Magistrate is duty bound to consider the same and, thereby, decide as to whether cognizance should be taken against the said accused-director, for, issuance of a demand/legal notice and a reply thereto are the essential components of constituting an offence under Section 138 of the NI Act. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

If the complainant claims before the Magistrate that no reply to the demand notice was made by the accused and, later on, at the stage of framing charge the accused can satisfy the trial Court that in spite of her/his reply detailing her/his non-involvement in the conduct of the business of the company upon appending document in its support, the complainant had not produced it before the Magistrate or despite of its production before the Court, the cognizance-taking Magistrate failed to consider it, in that scenario, the trial Court would be in a position to discharge her/him from the charge or, if s/he approaches this Court directly, this Court may quash the proceedings so for as it relates to the aforesaid accused who had clarified her/his position by replying to the demand/legal notice by denying any involvement in the conduct of the business of the company upon enclosing the authentic document/papers in substantiating the aforesaid claim. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

It is important to bear in mind that in the cases under Sections 138 and 140 of NI Act, the accused is entitled to seek discharge relying upon the contents of a reply to the demand/legal notice, for, the same is a prosecution material and, accordingly, the accused is also competent to approach this Court on the basis of the said material in addition to any other prosecution material, subject to the condition that the contents of the reply together with its annexed document are either conceded by the complainant or, if disputed by the complainant, it appears to the trial Court/this Court that the same does not require any formal proof through producing evidence before the trial Court. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

View of Indian Supreme Court about impleading the Director/s of the Company in a case under Section 138 read with 140 NI Act.
From a plain reading of all the cases referred to from the Indian jurisdiction, it is our understanding that in the cited cases there was no dispute about commission of an of¬fence under Section 138 of the NI Act by the company and its director/s. So, in the cited cases, offence was there, the offenders were there and the of¬fenders were named as the company and its BoD. But the Indian Supreme Court took the view that unless the complainant makes any averment about the responsibility of the director in the transaction in question, no cognizance is to be taken and no summon/warrant to be issued against the said director. In other words, the Indian Supreme Court laid down a principle that for taking cognizance of an offence under Sections 138 & 140 of the NI Act against a director of a company, there must be a specific allegation in the complaint-petition against a director specifying the accused-director’s nature of responsibility and duties in the said company. Engineer Sirajul Islam and another -Vs.- The State and another (Criminal) 2019 ALR (HCD) Online 230 ....View Full Judgment

The Negotiable Instruments Act, 1881 [XXVI of 1881]
Sections 138 and 140 read with
Code of Criminal Procedure [V of 1898]
Section 342
When the cheques in question were dishonoured due to insufficiency of fund, the plea taken by the accused petitioner that he has not put his signature in the cheques should not be considered positively for the reason. The High Court Division held that if there would have appeared any dissimilarity of signatures given by the drawer of the cheques, the bank manager would have definitely written that the signatures of the cheques are not similar and in that case he had returned back the cheques as unpaid due to dissimilarity of the drawer’s signature. But in the instant cases, no such remarks were passed by the bank manager at the time when the cheques were returned back as unpaid. Rather, he has dishonoured the cheques due to insufficiency of fund in the account of the accused petitioner. The High Court Division finds no merit in these Rule. Md. Abul Hashem -Vs.- The State and another. (Criminal) 2019 ALR (HCD) Online 82 ....View Full Judgment

The Negotiable Instruments Act, 1881 [XXVI of 1881]
Sections 138 and 140 read with
Code of Criminal Procedure [V of 1898]
Section 561A
An offence under section 138 of the Negotiable Instrument Act is committed if the cheque is dishonoured, so a criminal proceeding under section 138 can be proceeded independently of the civil suit. The High Court Division held that admittedly the bank filed Artharin suit against the present petitioner for huge amount and as per the case of the Rule petitioner the said suit was decreed for taka more than 11,00,00000/- (eleven crore) whereas the case in question under section 138 of the Negotiable Instrument Act is only for 10,00,000/-(ten lacs).There is nothing be-fore us to show that the transaction is same. However, the main grievance of the Rule petitioner is that since the bank has already filed a case for realization of money, the bank cannot file a case under section 138 of the Negotiable Instrument Act against the petitioner and the continuation of the proceeding under section 138 is nothing but the abuse of the process of the Court. But the law is settled now, that in the case of Manjur Alam Vs. State 55 DLR (AD) page 62 it has been held by the Appellate Division that an offence under section 138 of the Negotiable Instrument Act is committed if the cheque is dishonoured, so a criminal proceeding under section 138 can be proceeded independently of the civil suit. The same view appears to have been taken in the case of Khandaker Mahbub Uddin Vs. State 49 DLR page 132.In the suit case this Division held that there is nothing in law precluding a criminal case on acount of civil suit pending against the petitioner on the same fact, the criminal case stand for the offence while the civil suit is for realization of money and both can stand together. Having regards to the above decision of this Court the High Court Division finds it difficult to discover any case in support of the Rule petitioner. As such, the High Court Division finds no merit in the Rule. In the result, the Rule is discharged. Md. Sirajul Islam. -Vs- The State. (Criminal) 2019 ALR (HCD) Online 172 ....View Full Judgment

Negotiable Instruments Act [XXVI of 1881]
Sections 138 and 140 read with
Code of Criminal Procedure [V of 1898]
Section 265C
If the cheque deposited after expiry of its validity as per section 138(1)(a) of the Negotiable Instruments Act then the accuseds will get benefit upon adducing evidence in the trial. But at the stage of framing charge, trial Court is not under obligation to judge truth, veracity and effect of the evidence thoroughly and meticulously.
The High Court Division held that in framing charge, learned Additional Metropolitan Sessions Judge was restricticed to find out whether there was a primafacie case or not for proceeding the accuseds and could not enter into a detailed discussions of the merits or demerits of the case. In revisional jurisdiction, the High Court Division cannot, in our opinion, launch on a detailed and meticulous examination of the case on merits and cannot judge truth, veracity and effect of the evidence in disposing revisional application filed against the order of framing charge. Rashiduzzaman Millat and another -Vs.-The State and another (Criminal) 2019 ALR (HCD) Online 344 ....View Full Judgment

Section ‘138A’ has been inserted in Negotiable Instruments Act, 1881 by section 3 of the Negotiable Instruments (Amendment) Act, 2006 (Act No. III of 2006). The provision of section 138A is clear and unambiguous. By inserting section 138A in the original NI Act, 1881 the parliament has intentionally made a bar in preferring an appeal against 4 any order of sentence under sub-section (1) of section 138. By using the words “notwithstanding anything contained in the Code of Criminal Procedure, 1898” and the words “unless an amount of not less than fifty per cent of the amount of the dishonored cheque is deposited before filing the appeal in the Court which awarded the sentence” clearly suggest that the provisions of the code of criminal procedure in respect of preferring appeal under NI Act will not be applicable and before filing the appeal 50% of the amount of the dishonored cheque is to be deposited in the Court which awarded the sentence (underlined to give emphases). The Court which awarded the sentence specifically indicates that said amount must be deposited in the Court who awarded the sentence, nothing more nothing less inasmuch as that after awarding sentence under sub-section (1) of section 138, receipt of even total dues by the complainant from the convict will not fulfill the requirement of section 138A of the NI Act. Mohammad Abdul Kader alias Karim -Vs.- The State (Criminal) 2019 ALR (HCD) Online 209 ....View Full Judgment