Kishore Goyal vs Hanif Patel

N.K. Mody, J.—Being aggrieved by the order dated 17-7-2009 passed by JMFC, Indore in Criminal Case No. 15233/2009, whereby the application filed by the petitioner for dismissal of the complaint was dismissed, the present petition has been filed.

Short facts of the case are that the respondent filed a complaint u/s 138 of Negotiable Instruments Act (which shall be referred hereinafter as "NI Act") alleging that a cheque was issued by the petitioner for a sum of Rs. 1,00,000/- on 10-9-2007 in favour of Kudrat Patel, father of the respondent. It was alleged that the cheque was presented by the respondent for collection through its banker which was returned by the concerned Bank with a memorandum bearing remark "account closed". It was alleged that vide notice dated 20-11-2007 demand was made by the respondent but neither the notice was replied nor the cheque amount was paid, thus, petitioner committed an offence alleged to have been committed u/s 138 of NI Act. It was prayed that after taking cognizance of the offence, petitioner be convicted. Upon presentation of complaint cognizance of the offence was taken by learned Trial Court and notices were issued to the petitioner. Upon issuance of notice the petitioner approached this Court by filing a petition for quashment of complaint which was numbered as M.Cr.C. No. 2846/2009 and was disposed of by this Court vide order dated 24-4-2009 wherein it was directed that the petitioner shall move an appropriate application before the learned Court below. It was further directed that if such an application is filed, then, after giving an opportunity of hearing to the respondent the same shall be decided by learned Court below in accordance with law without being impressed with the fact that cognizance of the offence has already been taken against the petitioner. In compliance of the order passed by this Court application was filed by the petitioner before learned Court below and after giving an opportunity of hearing to the respondent the application was dismissed by learned Court below vide order dated 17-7-2009 against which the present petition has been filed.

Learned Counsel for the petitioner argued at length and submits that the impugned order passed by learned Trial Court is illegal, incorrect and deserves to be set-aside. It is submitted that from the complaint it is evident that the alleged cheque was issued by petitioner in favour of Kudrat Patel while the complaint has been filed by respondent/Hanif Patel who is claiming himself to be the son of Kudrat Patel. It is submitted that in the complaint it is nowhere stated by the respondent that when Kudrat Patel died. It is submitted that in the complaint it is also nowhere stated how the respondent is entitled to prosecute the petitioner while the cheque was issued in favour of Kudrat Patel. Learned Counsel submits that in the facts and circumstances of the case, the impugned order passed by learned Trial Court whereby the application filed by the petitioner was dismissed is illegal, incorrect and deserves to be set-aside. Learned Counsel placed reliance on a decision of Kerala High Court in the matter of P.K. Koya Moideen Vs. G. Hariharan, , wherein the cheque was drawn in the name of father of complainant and subsequent to issuance of cheque father of complainant died and thereafter the complaint was filed by the complainant claiming payment in the capacity of executor of father''s Will Hon''ble Kerala High Court held that genuineness of Will also to be adjudicated and such executor of Will, therefore, cannot be termed as "holder in due course". It is submitted that in the facts and circumstances of the case, petition filed by the petitioner be allowed and the impugned order passed by learned Trial Court be set-aside and the prosecution initiated by the respondent be quashed.

Mr. Balendu Dwivedi, learned Counsel for the respondent submits that cognizance of the offence has already been taken by learned Trial Court. It is submitted that since respondent was the son of deceased in whose favour cheque was issued, therefore, learned Trial Court committed no error in dismissing the application filed by the petitioner. Learned Counsel for the respondent placed reliance on a decision of Hon''ble Apex Court in the matter A.V. Murthy Vs. B.S. Nagabasavanna, , wherein Hon''ble Apex Court has observed that in view of Sections 118 and 139 of the Negotiable Instruments Act, Section 25(3) of the Contract Act, 1872, and in the presence of a documentary evidence which might amount to acknowledgment reviving the period of imitation, the present case was not one where the cheque was drawn in respect of a debt or liability, which was completely barred from being enforced under law. However, these are matters to be agitated before the Magistrate by way of defence of the respondent. But at this stage of the proceedings, to say that the cheque drawn by the respondent was in respect of a debt or liability which was not legally enforceable, was clearly illegal and erroneous. Therefore, it is held that the Sessions Court and the High Court erred in quashing the complaint proceedings. Further reliance is placed on a decision of this Court in the matter of Ramprasad v. Smt. Sudhaben ILR MP Series Notes of Cases 60, wherein cheque was drawn in favour of a person who was died and complaint was filed on behalf of L.Rs. this Court held that complaint is maintainable. Reliance is placed on a decision in the matter of Padam Parshad v. Lok Nath Ishwar Sarup AIR 1964 Punjab 497, wherein suit was filed on the basis of promissory note by heirs of holder promissory note Full Bench of Punjab High Court held that suit is maintainable. It is submitted that petition filed by the petitioner is having no merits and the same be dismissed.

As per Section 142 of NI Act cognizance of the offence can be taken upon the complaint in writing to payee or the holder in due course of the cheque. The word payee, holder and holder in due course is defined in Sections 7, 8 and 9 of NI Act, which reads as under:

Drawer, Drawee.- The maker of a bill of exchange or cheque is called the ''drawer''; the person thereby directed to pay is called the ''drawee''.

"Drawee in case of need".- When in the bill or in any endorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need, such person is called a "drawee in case of need".

"Acceptor".- After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the "acceptor".

"Acceptor for honour".- When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts it supra protest for honour of the drawer or of any one of the endorsers, such person is called an "acceptor for honour".

"Payee".- The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the "payee".

"Holder".- The "holder" of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto.

Where the note, bill or cheque is lost or destroyed, its holder is the person so entitled at the time of such loss or destruction.

"Holder in due course".- "Holder in due course" means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

In the present case, cheque is in favour of deceased/Kudrat Patel. In the complaint it is nowhere stated that when Kudrat Patel has died. Similarly, except in title nowhere it has been stated by the respondent that how the respondent is entitled for the cheque amount. It is also not mentioned in the complaint that who are the legal representatives of deceased/Kudrat Patel and prior to his death any Will was executed by the deceased or not ? Since the complaint has been filed by a person in whose favour no cheque was issued by the petitioner, therefore, in the opinion of this Court no cognizance could have been taken against the petitioner for an offence alleged to have been committed by the petitioner keeping in view Sub-section (a) of Section 142 of the NI Act. In view of this, the petition filed by the petitioner is allowed and the impugned order passed by learned Trial Court and also the complaint filed by the respondent stands quashed. Petition stands discharged. C.C. as per rules.