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Gujarat High Court · body

2011 DIGILAW 878 (GUJ)

RAMESHBHAI MANIBHAI PATEL v. STATE OF GUJARAT

2011-12-29

M.R.SHAH

body2011
JUDGMENT [1.0] Present application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC”) has been preferred by the applicants herein – original accused Nos.2 to 5 to quash and set aside the complaint being Criminal Case No.3861/2006 pending in the Court of learned Judicial Magistrate First Class, Anand for the offence under Section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as “NI Act”). [2.0] That respondent No.2 herein through her Power of Attorney holder has filed the impugned complaint being Criminal Case No.3861/2006 against the applicants – original accused Nos.2 to 5 and one another for the offence under section 138 of the NI Act for dishonour of cheque dated 17.04.2006 for an amount of Rs.10 lacs contending inter-alia that the aforesaid amount of Rs.10 lacs was advanced by her husband on 07.12.2004 and one writing was executed on 07.12.2004 by the original accused No.1 – partnership firm through its partner and administrator and for the said dues the cheque in question dated 17.04.2006 was given (post-dated) by the original accused No.1 – partnership firm signed by original accused No.2. It is further averred in the said complaint that her husband Jaykrishna Prabhudas Thakkar has expired and both of them have joint bank account in Bank of Baroda, Anand Branch and therefore, as a joint account holder in the bank as “holder in due course” of the said cheque, she has deposited the said cheque in their joint account which has been dishonoured for which the statutory notice was served and despite service of the same, the cheque amount is not paid and therefore, it is alleged that the applicants have committed the offence under section 138 of the NI Act. That in the said complaint, the learned JMFC, Anand has directed to issue summons against applicants and other for offence under Section 138 of the NI Act. Hence, being aggrieved and dissatisfied with the aforesaid, the applicants herein – original accused Nos.2 to 5 have preferred the present Criminal Miscellaneous Application under Section 482 of the CrPC. That in the said complaint, the learned JMFC, Anand has directed to issue summons against applicants and other for offence under Section 138 of the NI Act. Hence, being aggrieved and dissatisfied with the aforesaid, the applicants herein – original accused Nos.2 to 5 have preferred the present Criminal Miscellaneous Application under Section 482 of the CrPC. [3.0] Shri S.I. Nanavaty, learned Senior Advocate appearing on behalf of the applicants has vehemently submitted that as such the original complainant – Smt. Kantaben Jaykrishnabhai Thakkar cannot be said to be a payee or holder in due course of the cheque and therefore, she could not have filed the impugned complaint as she has no locus standi to file the complaint against the applicants for the offence under Section 138 of the NI Act for dishonour of the cheque of which she is neither the payee nor holder in due course. [3.1] Relying upon the definition of “Payee” and “Holder in due course”, it is submitted that the original complainant cannot be said to be a “payee” or “holder in due course” as per Sections 7 and 9 of the NI Act and therefore, considering Section 142 of the NI Act, it is submitted that as the original complainant is neither the payee nor holder in due course of the cheque, which has been dishonoured, she had no locus standi to file the impugned complaint and therefore, the learned Magistrate has committed an error in taking cognizance of the said complaint and the offence. Shri Nanavaty, learned counsel appearing on behalf of the applicants has relied upon the decision of the Bombay High Court in the case of Vishnupant Chaburao Khaire v. Kailash Balbhir Madan reported in 2010 Cri.L.J. 2166 and it is submitted that as held by the Bombay High Court, a person named in the instrument, to whom or to whose order money is by instrument directed to be paid can be said to be “payee” as provided under Section 7 of the NI Act. It is further submitted that in the said decision, Bombay High Court has also held that only a person who for consideration is entitled to possession of bearer cheque or payee or endorse thereof can be said to be “holder in due course” as provided under Section 9 of the NI Act. It is further submitted that in the said decision, Bombay High Court has also held that only a person who for consideration is entitled to possession of bearer cheque or payee or endorse thereof can be said to be “holder in due course” as provided under Section 9 of the NI Act. It is submitted that as held by the Bombay High Court, complaint cannot be filed by legal heirs of the payee unless the succession certificate or letters of administration or probate has been obtained from the competent Court. [3.2] It is further submitted by Shri Nanavaty, learned counsel that legal representative cannot by delivery only negotiate instrument indorsed by deceased as per Section 57 of the NI Act. It is submitted that as per Section 46 of the NI Act, the making, acceptance or indorsement of a promissory note, bill of exchange or cheque is completed by delivery, actual or constructive. Therefore, it is submitted that unless the cheque was indorsed by the deceased in whose favour the cheque was issued, in favour of the complainant, the complainant would not have any locus standi to file the complaint for dishonour of cheque which was issued in the name of her husband solely on the ground that she and her husband (in whose favour cheque was issued) were having joint bank account. Therefore, it is submitted that when the complainant was neither the payee nor the holder in due course of the cheque which has been dishonoured, she could not have filed the complaint against the applicants for the offence under Section 138 of the NI Act. That the learned Magistrate has materially erred in taking cognizance of the said offence in the complaint filed by the complainant who has no locus standi. [3.3] It is further submitted by Shri Nanavaty, learned counsel appearing on behalf of the applicants that as such there are no specific averments and allegations against the applicants that they were in day to day affairs and management of the original accused No.1 – partnership firm. [3.3] It is further submitted by Shri Nanavaty, learned counsel appearing on behalf of the applicants that as such there are no specific averments and allegations against the applicants that they were in day to day affairs and management of the original accused No.1 – partnership firm. It is submitted that unless there are any specific allegations and averments in the complaint that the applicants were also responsible in day to day affair and management of the original accused No.1 – partnership firm, which has issued the cheque, the applicants cannot be held vicariously liable under Section 141 of the NI Act for dishonour of the cheque issued by the original accused No.1 – partnership firm. In support of his above submissions, he has relied upon the decisions of the Hon'ble Supreme Court in the case of National Small Industries Corporation Ltd. v. Harmeet Singh Paintal & Anr. reported in (2010) 3 SCC 330 as well as the recent decision of the Hon'ble Supreme Court in the case of Central Bank of India v. M/s. Asian Global Ltd. & Ors. reported in (2010)11 SCC 203 . Making above submissions and relying upon above decisions, it is requested to allow the present application. [4.0] Application is opposed by Shri S.P. Majmudar, learned advocate appearing on behalf of the original complainant. It is submitted that the complainant and her husband were the joint holders of the bank account in which the cheque in question was deposited and therefore, the complainant can be said to be holder in due course of the said cheque. [4.1] It is further submitted by Shri Majmudar, learned advocate appearing on behalf of the original complainant that in any case the complainant can be said to be holder of the cheque and under Section 118(g) of the NI Act, there is a statutory presumption that every holder of the cheque is “Holder in due course” unless such a presumption is rebutted, which can only be at the time of trial and on leading the evidence. Therefore, it is requested not to quash and set aside the impugned complaint at this stage in exercise of powers under Section 482 of the CrPC. Therefore, it is requested not to quash and set aside the impugned complaint at this stage in exercise of powers under Section 482 of the CrPC. [4.2] It is further submitted by Shri Majmudar, learned advocate that even otherwise the original complainant being the heir and legal representative of the deceased Jaykrishna Prabhudas Thakkar in whose favour the cheque was issued and therefore, for dishonour of the cheque which was in favour of her husband she had a right to file the impugned complaint and has locus to file the impugned complaint, being holder of the cheque as heir and legal representative of her husband. Therefore also, it is requested not to quash and set aside the impugned complaint at this stage. [4.2] Shri Majmudar, learned advocate appearing on behalf of the original complainant has relied upon the decision of the Hon'ble Supreme Court in the case of Punjab & Sindh Bank v. Vinkar Sahakari Bank Ltd. & Ors. reported in 2001 (3) GLH 372 in support of his submission that the original complainant has locus standi to file the complaint. Shri Majmudar, learned advocate has also relied upon the decision of the Madhya Pradesh High Court in the case of Champalal Gajanand v. Padam Chand Sheolal Jain & Ors. reported in AIR 1971 MP 133 by submitting that as held by the Madhya Pradesh High Court, on the death of the holder of a cheque or promissory note or bill of exchange, his heirs became entitled to sue for recovery of loan advanced by promissory note. [4.3] Shri Majmudar, learned advocate appearing on behalf of the original complainant has vehemently submitted that in the facts and circumstances of the case, neither Section 46 nor Section 57 of the NI Act would be applicable. Making above submissions and relying upon the above decisions, it is requested to dismiss the present application. [5.] Shri Dabhi, learned Additional Public Prosecutor has requested to pass appropriate order considering the facts and circumstances of the case. [6.] Heard learned advocates appearing for respective parties at length. Making above submissions and relying upon the above decisions, it is requested to dismiss the present application. [5.] Shri Dabhi, learned Additional Public Prosecutor has requested to pass appropriate order considering the facts and circumstances of the case. [6.] Heard learned advocates appearing for respective parties at length. A pure question of law which is posed for consideration of this Court is whether a joint holder of the bank account of the payee in whose favour the cheque is issued, has any locus standi to file the complaint and whether the joint holder of the bank account can be said to be a Payee and/or the Holder in due course of the said cheque which has been issued in favour of another joint account holder for his independent dues? [6.1] In the present case, admittedly and even as per the averments in the complaint, the amount of Rs.10 lacs was due and payable to Jaykrishna Prabhudas Thakkar, the husband of the original complainant as the said amount was advanced by him to the original accused No.1 – partnership firm. That according to the complainant, a writing was executed with respect to the aforesaid dues by the original accused No.1 – partnership firm on 07.12.2004 and on that day the cheque in question dated 17.04.2006 (post-dated) was given which was issued in the name of her husband Jaykrishna Prabhudas Thakkar. That the said Jaykrishna Prabhudas Thakkar had expired and thereafter the said cheque is deposited by the original complainant in the bank account jointly hold by the complainant and her husband Jaykrishna Prabhudas Thakkar and the said cheque has been dishonoured. It is the specific case on behalf of the complainant in the complaint that the bank account in which the cheque was deposited was jointly hold by the complainant and her husband Jaykrishna Prabhudas Thakkar and therefore, she can be said to be the Payee and/or the Holder in due course. It is to be noted that the impugned complaint is not filed as an heir of deceased Jaykrishna Prabhudas Thakkar and as stated herein above, the impugned complaint has been filed as Payee and/or the Holder in due course of the cheque being the joint holder of the bank account in which the cheque has been deposited. It is to be noted that the impugned complaint is not filed as an heir of deceased Jaykrishna Prabhudas Thakkar and as stated herein above, the impugned complaint has been filed as Payee and/or the Holder in due course of the cheque being the joint holder of the bank account in which the cheque has been deposited. Even it is not the case of the complainant that the said cheque has been indorsed in her favour or it has been possessed by her for consideration. Therefore, it requires to be considered whether being joint holder of the bank account with her husband, in whose favour the cheque has been issued for his dues, the complainant can be said to be the Payee and/or Holder in due course of the cheque who can file and/or who can have a locus standi to file the complaint. As per Section 7 of the NI Act “Payee” means a person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid. In the present case, admittedly, the husband of the complainant i.e. Jaykrishna Prabhudas Thakkar is named in the instrument / cheque to whom the money is directed to be paid. Under the circumstances, only Jaykrishna Prabhudas Thakkar – husband of the original complainant can be said to be the “Payee”. [6.2] As per Section 9 of the NI Act, “Holder in due course” means any person who for consideration becomes the possessor of promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if, before the amount mentioned in it became payable, without having sufficient cause to believe that any defect existed in title of the person from whom he derived his title. In the present case, it is not the case on behalf of the complainant that she had possessed the cheque for consideration and/or the said cheque was indorsed in her name. Under the circumstances, she cannot be said to be Holder in due course of the cheque. As stated herein above, she claims to be the Holder in due course of the cheque solely on the ground that she is the joint holder of the bank account with her husband in whose favour the cheque was issued. The aforesaid has no substance and cannot be accepted. As stated herein above, she claims to be the Holder in due course of the cheque solely on the ground that she is the joint holder of the bank account with her husband in whose favour the cheque was issued. The aforesaid has no substance and cannot be accepted. Merely because a person is the joint holder of the bank account with “Payee”, in whose favour the cheque is issued, he/she cannot be said to be the Holder in due course of the said cheque who can have a locus standi to file the complaint for dishonour of the said cheque. A person can be the joint holder of the bank account with another person for their internal convenience, however, such a person cannot be said to be the Holder in due course of the cheque which has been issued in favour of another person i.e. another joint holder of the bank account. Such a joint holder of the bank account (other than in whose favour the cheque is issued) has nothing to do with the person who has issued the cheque for their dues vis-à-vis another person (another joint holder of the bank account). [6.3] Under the circumstances, the original complainant cannot be said to be the “Payee” or “Holder in due course” of the cheque which has been dishonoured so as to enable her to file the complaint for the offence under Section 138 of the NI Act. Under Section 142 of the NI Act, no Court shall take cognizance of any offence punishable under Section 138 of the NI Act except upon a complaint in writing, made by the “Payee” or the case may be the “Holder in due course” of the cheque. The present respondent – complainant is not the person named in the instrument nor she is a person to whom or to whose order money by the instrument is directed to be paid. Admittedly, there is no endorsement on the cheque by the deceased Payee in favour of the respondent – complainant. So, it is not that the amount under the instrument/cheque was directed to be paid to her. Admittedly, there is no endorsement on the cheque by the deceased Payee in favour of the respondent – complainant. So, it is not that the amount under the instrument/cheque was directed to be paid to her. [6.4] Now, so far as the reliance placed upon the decision of the Hon’ble Supreme Court in the case of Punjab & Sindh Bank (Supra), by the learned advocate appearing on behalf of the original complainant is concerned, considering the same, the same shall not be applicable to the facts of the present case. The controversy before the Hon’ble Supreme Court was altogether a different controversy. In the case before the Hon’ble Supreme Court, the “Pay Order” was dishonoured by the drawer bank and the holder thereof – Punjab & Sindh Bank filed a complaint under Section 138 of the NI Act and the controversy raised was that the said instrument was not a cheque. Under the circumstances, the said decision would not be of any assistance to the learned advocate appearing on behalf of the respondent – original complainant. [6.5] Now, so far as the decision of the Madhya Pradesh High Court in the case of Champalal Gajanand (Supra) relied upon by the learned advocate appearing on behalf of the original complainant is concerned, the same shall also not be applicable to the facts of the present case. In the case before the Madhya Pradesh High Court, the dispute raised was whether if a holder named is dead, his heirs become entitled to sue for recovery of loan evidenced by promissory note. It was not the case with respect to filing of the complaint under Section 138 of the NI Act. In the present case as stated herein above, the original complainant has not filed the impugned complaint as an heir of the holder of the cheque i.e. as heir of deceased Jaykrishna Prabhudas Thakkar. Even as per the cause title also, she has filed the impugned complaint in her individual capacity as holder in due course of the cheque being a joint holder of the bank account with her husband. Therefore, this Court is not expressing anything on whether on the death of holder of the cheque, his heir and/or legal representative without obtaining any succession certificate and/or probate can file the complaint for offence under Section 138 of the NI Act or not and the said question is kept open. Therefore, this Court is not expressing anything on whether on the death of holder of the cheque, his heir and/or legal representative without obtaining any succession certificate and/or probate can file the complaint for offence under Section 138 of the NI Act or not and the said question is kept open. [7.] In view of the above and for the reasons stated above, as the original complainant is not found to be Payee and/or Holder in due course of the cheque which has been dishonoured, she has no locus standi to file the complaint for the offence under Section 138 of the NI Act for dishonour of the cheque in question. Under the circumstances, the learned Magistrate has committed an error in taking cognizance of the said offence for the offence under Section 138 of the NI Act for dishonour of the cheque, in the complaint filed by respondent No.2 herein. Under the circumstances, the impugned complaint at the instance of respondent No.2 herein cannot be sustained and the same deserves to be quashed and set aside and consequently the order passed by the learned Magistrate taking cognizance of the offence in the said complaint also deserves to be quashed and set aside. It is required to be noted that even otherwise the impugned complaint deserves to be quashed and set aside against applicant Nos.2 to 4 herein in absence of any specific averments and allegations against them that they were in day to day affairs and management of the original accused No.1 – partnership firm so as to make them vicariously liable under Section 141 of the NI Act for the offences alleged to have been committed by original accused No.1 – partnership firm. [8.] In view of the above and for the reasons stated above, present Criminal Miscellaneous Application succeeds. The impugned complaint filed by respondent No.2 – original complainant being Criminal Case No.3861/2006 pending in the Court of learned JMFC, Anand is hereby quashed and set aside so far as applicant – original accused Nos.2 to 5 are concerned. [8.] In view of the above and for the reasons stated above, present Criminal Miscellaneous Application succeeds. The impugned complaint filed by respondent No.2 – original complainant being Criminal Case No.3861/2006 pending in the Court of learned JMFC, Anand is hereby quashed and set aside so far as applicant – original accused Nos.2 to 5 are concerned. However, it is observed that it will always be open for the original complainant to initiate appropriate proceedings for recovery of the dues of her husband and as and when such proceedings are initiated, the same be considered in accordance with law and on merits and if otherwise permissible under the law, without in anyway being influenced by the present order which is for quashing and setting aside the complaint for the offences under Section 138 of the NI Act. Rule is made absolute to the aforesaid extent.