Laxmi Dyechem v State of Gujarat

• The appellant filed forty complaints under S.138 of the Negotiable Instruments Act, 1881 for cheques returned because the drawer's signature did not match the specimen with the bank. Relying on Vinod Tanna v Zaher Siddiqui (2002), the Gujarat High Court quashed the complaints, holding that S.138 applies only where the cheque is dishonoured for insufficiency of funds or because it exceeds the arrangement.

1. Whether dishonour of a cheque because the signature does not match the specimen can constitute an offence under S.138.

• The High Court's view was too narrow. S.138 is to be read purposively; dishonour on grounds such as account closed, payment stopped, or signatures not matching may attract it where the drawer has brought about the dishonour to avoid payment. Whether that is so is a matter for trial. The appeals were allowed and the complaints restored.

The words "amount of money ... is insufficient" in S.138 are a genus covering situations where the drawer deliberately prevents payment. A drawer who changes his signature, closes the account or instructs the bank not to pay cannot escape liability by labelling the return as technical; the question is decided at trial on the evidence.