ORDER This appeal by special leave is directed against the judgment and order dated 25th April, 2000 passed by the learned Single Judge of the High Court of Madhya Pradesh, Bench at Indore in Criminal Revision No. 1702 of 1999 by which the Revision Petition filed by the appellant was dismissed. 2. The appellant having obtained a loan of Rs. 2,50,000/- (Rupees two lakhs and fifty thousand) from one Dhairyasheel Rao Deshmukh, issued five post dated cheques in the denomination of Rs.50,000/- (Rupees fifty thousand) each in the name of Dhairyasheel Rao Deshmukh. The said Dhairyasheel Rao Deshmukh died. The respondent being the wife and legal heir of the deceased Dhairyasheel Rao Deshmukh presented the cheques to the concerned bank and the same were dishonoured. Thereafter, the respondent gave statutory notice to the appellant for payment of the amount. The appellant did not comply with the demand as 2 required in the notice got issued by the respondent. This was followed by a complaint, filed by the respondent herein, under Section 138 of the Negotiable Instruments Act, 1881 (for short "the Act") against the appellant. The appellant resisted the complaint by contending that the appellant is neither the payee nor the holder of the cheques in due course and therefore no cognizance can be taken against him. The trial Court rejected the same. The appellant challenged the said order in the High Court. The High Court, after an elaborate consideration of the matter, dismissed the Criminal Revision Petition. 3. The short question that arises for our consideration is, as to whether the Court committed any error in taking cognizance of an offence punishable under Section 138 of the Act against the appellant. 4. There is no dispute before us that the respondent herein (since deceased) is the wife of the deceased Dhairyasheel Rao Desmukh, thus the legal heir of the deceased. It is not the case of the appellant that there are disputes among the legal heirs of the deceased and therefore, the respondent in law, would not be in a position to give a valid discharge in case the amounts are paid to her. 5.
It is not the case of the appellant that there are disputes among the legal heirs of the deceased and therefore, the respondent in law, would not be in a position to give a valid discharge in case the amounts are paid to her. 5. It may be necessary to notice Section 142 of the said Act which is reproduced hereunder: "142.Cognizance of offences-- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 ( 2 of 1974 )— (a) no court shall take Cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause-of-action arises under clause (c) of the proviso to Section 138 : Provided that the Cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. (c) no Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138." 6. A plain reading of the provision makes it abundantly clear that the Court shall not take cognizance of any offence punishable under Section 138 of the Act except upon a complaint, in writing, made by the payee or, as the case may be, the holder in the due course of the cheque. The expression ‘payee’ is defined under Section 7 of the Act which says "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’". Section 9 defines the expression ‘holder in due course’ which reads as under: "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 endorsee thereof, if payable to bearer, or the payee or endorsee 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." 7.
A complaint under Section 138 of the Act can be filed by the payee or, as the case may be, the holder in due course of the cheque. 8. Can it be said that the respondent wife (since deceased) is not the ‘holder in due course’ of the cheque? In Muthuveeran Chetty Vs. Govindan Chetty, (1961) 2 MLJ 470 a Full Bench of the Madras High Court observed that a person to whom the property in the negotiable instrument stands transferred by operation of law is entitled to sue on the note as such. It was held that the property in the promissory note can devolve upon the legal heirs of the deceased payees on the operation of law and that the absence of any endorsement or assignment did not affect the claim of the person suing. The Madras High Court rightly declared the law and held: "It is clear that in so far as the modes of transfer of negotiable instruments are concerned, the Negotiable Instruments Act is not exhaustive and does not prevent the passing of property in the note by operation of law. ...the property in the notes descended from father to son by operation of law and the son was, held entitled to sue on the notes." 9. It was further held that "it is not necessary for the person suing on the promissory note to rely only on an endorsement or such other mode as is provided for in the Negotiable Instruments Act and the suit by a person on whom the right devolves by operation of law cannot be defeated by absence of the endorsement." 10. The law applicable in respect of a promissory note would be equally applicable to a cheque as both of them are negotiable instruments within the meaning of the provisions of the said Act. It is clear from the definition of ‘holder in due course’ that ‘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. The deceased Dhairyasheel Ra o Desmukh was undoubtedly the holder in due course of the cheque. The respondent, being the legal heir of the deceased, stepped into the shoes of her husband and has become the holder of the cheque in due course.
The deceased Dhairyasheel Ra o Desmukh was undoubtedly the holder in due course of the cheque. The respondent, being the legal heir of the deceased, stepped into the shoes of her husband and has become the holder of the cheque in due course. All the rights possessed by the original holder of the cheque devolve upon the legal heirs by operation of law. There is no provision in Negotiable Instruments Ac t prohibiting the legal heirs to file the complaint under Section 138 of the Act. The legal heirs of the holder in due course of the cheque are clearly entitled to rely upon the instrument and there is no provision in the Act which stands in the way of legal heirs initiating proper and appropriate proceedings as they step into the shoes of the original holder in due course of the cheque. 11. The High Court having considered the matter in the right perspective came to the right conclusion that there is n o provision under the Act which precludes the legal heir of the holder in due course of the cheque to file complaint under Section 138 of the Act. In our opinion that a heir of the deceased holder in due course of the cheque can bring action on the basis of the cheque to recover the amount due thereon to the deceased holder by reason of the fact that he succeeds to the estate of the deceased holder by inheritance i.e.; operational of law and if that be so there is no reason as to why the legal heirs cannot file complaint under Section 138 of the Act. There is, therefore, no reason on principle to hold that a complaint filed by a legal heir of the original holder in due course of the cheque cannot be taken cognizance by the court. In our considered view, neither the cause of action nor the right conferred upon the holder in due course of the cheque to proceed and file complaint under Section 142 of the Act for the offence under Section 138 of the said Act comes to an end after the death of the holder in due course of the cheque.
In our considered view, neither the cause of action nor the right conferred upon the holder in due course of the cheque to proceed and file complaint under Section 142 of the Act for the offence under Section 138 of the said Act comes to an end after the death of the holder in due course of the cheque. The cause of action certainly survives as the legal heirs step into the shoes of the holder of the cheque in due course by operation of law and are entitled to prosecute and initiate the proceedings under Section 142 of the Act. 12. For the aforestated reasons, the appeal is dismissed. However, we make it clear that we have not expressed any opinion on the merits of the case.