The Supreme Court has come down heavily on the Rajasthan High Court order for quashing the proceedings in a case under Section 138 of the Negotiable Instruments Act 1881, observing that the bank cannot deny the existence of an account, when it has itself returned a cheque from the same, with remarks, ‘Account Frozen’.
A Bench comprising Chief Justice of India (CJI) N.V. Ramana, Justice A.S. Bopanna and Justice Hima Kohli set aside the Rajasthan High Court order, after observing discrepancy in the statements of bank managers.
The Court noted that while the managers denied opening and maintaining any such account in their bank, but the dishonoured cheque drawn by the respondent in favour of the appellant, was returned with the remark ‘account frozen,’ which meant the account existed.
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The Apex Court then directed the trial court to consider the matter, not merely on the deposition of bank managers, but in detail and conclude it within six months.
Case name: Vikram Singh vs Shyoji Ram