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S.8,9,138 of Negotiable Ins.Act (Criminal Law)

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This query is : Resolved


Author : Rahul Singh

Posted On 05 February 2010 at 21:46

I need a ruling to the fact that "Complaint case for bouncing of Cheque can't be filed by the LR's of the deceased?" IF any of the Apex Court




Expert : N RAMESH.

Posted On 05 February 2010 at 23:30


Vishnupant vs Kailash (Bombay High Court)
Judgement dated 25-1-2010.

" By demise of payee, it cannot be said that any of the heirs or legatees get right to issue notice under proviso (b) to s. 138 of the Act. Only a person who is authorized by the succession certificate, letters of administration or probate granted by the court, is entitled to issue notice under proviso (b) to s. 138 of the Act and to file complaint u/s. 142(a) of the Act. In the present case, respondent-complainant is not payee or holder in due course as per the law. He has no authority to demand money and lodge a complaint as he cannot give valid discharge for payment made to him - Hence, the order of issuance of process against the petitioner-accused quashed and set aside"



Expert : Adinath@Avinash Patil

Posted On 07 February 2010 at 06:22

RAMESH THAX FOR LATEST CASE LAW.



Expert : Adinath@Avinash Patil

Posted On 07 February 2010 at 06:48

DEAR RAHUL HERE IS COMPLETE JUDGMENT OF BOMBAY HIGH COURT AURANGABAD BENCH.

IN THE HIGH COURT OF JUDICATURE AT BOMBA Y
APPELLATE SIDE, BENCH AT AURANGABAD
CRIMINAL WRIT PETITION NO. 842 OF 2009
Vishnupant s/o Chaburao Khaire,
age 50 years, occup. business,
r/of Avi Lodge, Pansare Galli,
Urban Bank Road, Ahmednagar. Petitioner
versus
Kailash s/o Balbhir Madan,
age 52 years, occup. business,
resident of Amit Watch Company,
Navi Peth, Ahmednagar. Respondent
Shri
A.S. Zarekar, Advocate for the Petitioner.
Shri C.R. Deshpande, Advocate, instructed by
Ms. Sabahat T. Kazi, Advocate, for Respondent.
Coram
: P.R.Borkar,J.
Judgment reserved on : 09.01.2010
Judgment pronounced on: 25.01.2010
JUDGMENT
01. Heard Shri A.S. Zarekar learned Advocate for
the petitioner and Shri C.R. Deshpande, learned
Advocate instructed by Ms. Sabahat Kazi, learned
Advocate for the Respondent.
02. Rule. By consent, rule made returnable
forthwith and the writ petition is taken up for final
disposal at the admission stage.
2
03. This writ petition is filed by original
accused for quashing and setting aside the order
passed on 7.8.2008 by the learned Judicial Magistrate,
First Class, Ahmednagar on complaint Exhibit 1 in
S.T.C. No.1467 of 2008 filed by present Respondent,
whereby process was issued against the Petitioneraccused
for offence punishable under Section 138 of
the Negotiable Instruments Act, 1881 (for short,
"N.I.Act").
04. The point that is raised in this petition is
"Whether one of the heirs of deceased payee
can file complaint under Section 138 of the
Negotiable Instruments Act. ?".
05. It is no more disputed at this stage that on
28.8.2007, petitioneraccused
had issued a cheque
bearing No. 034452 for Rs.3,00,000/= (Rupees Three
lakhs only) in favour of father of the Respondentcomplainant.
Balbhir, father of the Respondentcomplainant
died on 5.9.2007 in a vehicular accident.
On 5.2.2008, the Respondentcomplainant
presented the
said cheque for encashment to the Punjab National
Bank. However, the same was dishonoured and returned
with endorsement "insufficient funds". On 3.3.2008,
the respondentcomplainant
issued legal notice through
3
Advocate calling upon the petitioneraccused
to pay
the amount due under the said cheque. However, since
the accused failed to pay the amount, the respondent
filed criminal case bearing S.T.C. No.1467 of 2008 in
the court of J.M.F.C., Ahmednagar against the accused
for having committed offence punishable under Section
138 of the N.I. Act. The learned Magistrate passed an
order on 7.8.2008 issuing process and it is this order
which is challenged in the present writ petition.
06. Shri Zarekar, learned Advocate for the
petitioner submitted that as far as taking of
cognizance of offence punishable under Section 138 of
the N.I.Act is concerned, as per Section 142 (a) of
the N.I.Act, notwithstanding anything contained in the
Code of Criminal Procedure, 1973, no court can 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. Learned Advocate Shri Zarekar further
submitted that in this case the respondentcomplainant
is neither the payee nor holder in due course and as
such, he was not entitled as per Section 142 (a) of
the N.I.Act to file complaint for offence punishable
under Section 138 of the N.I. Act.
4
07. Learned Advocate Shri Zarekar further
referred to section 7 of the N.I.Act which defines
various terms under the N.I.Act, including the term
"payee". Payee means a person named in the instrument,
to whom or to whose order the money is by the
instrument directed to be paid. The term "Holder in
due course" is defined in Section 9 as 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 this case,
admittedly the cheque was issued by the petitioneraccused
in the name of father of the respondentcomplainant.
It is, therefore, argued by Advocate Shri
Zarekar that the respondentcomplainant
could not be
"payee" in terms of definition as under Section 7 of
the N.I.Act. According to him, respondentcomplainant
had not for consideration beco me possessor of the
dishonoured cheque and, therefore, he is not "holder
in due course" as defined in Section 9. It is not that
the cheque was endorsed by the deceased Balbhir in the
name of present respondentcomplainant.
For all
5
thease reasons, the cognizance of complaint filed by
the respondent is bad in law and order of issuance of
process deserves to be quashed and set aside.
08. On the other hand, Shri C.R.Deshpande,
learned Advocate for the Respondentcomplainant
argued
that after the death of his father, the respondentcomplainant
stepped into the shoes of his father as a
payee and as such, was entitled to file complaint
against the petitioneraccused.
09. Learned Advocates for the respective parties
cited various authorities in support of their
submissions.
10. Shri Zarekar, learned Advocate for the
Petitioneraccused
first relied upon the case of Anil
Kumar vs. Ramakrishna Kartha 2009 All M R (Cri. )
Journal 252 which is a ruling by Single Bench of
Kerala High Court. It is held therein that the person
who is not a payee or endorsee is not entitled to
file a complaint for offence punishable under Section
138 of the N.I. Act. It is also observed in para 9
that in order to make a person, other than a payee, a
holder in due course of a cheque payable to order,
6
there shall be endorsement in his favour and a
delivery of the cheque as provided under Section 48 of
the N.I.Act and the delivery alone is not sufficient
to make him a holder in due course as endorsement is
necessary. Factual position in that case as borne out
from paragraph 2 of the judgment is that the revision
petitioner had issued cheque in favour of one
Krishnadas. The first respondent claimed that for
consideration he received the cheque from the brother
of the payee as the payee was out of India and
presented the cheque for encashment and as it was
dishonoured for want of sufficient funds, he sent
notice demanding the amount and on failure, lodged the
complaint. Although the trial court and the Sessions
Court found that the complaint was maintainable and
therefore sustained the conviction of the revision
petitioner, the learned Single Bench of Kerala High
Court on the basis of the said set of facts, held that
the complainant was not payee or endorsee and thus not
entitled to lodge the complaint. Revision was
allowed, conviction was set aside and the complaint
was dismissed. It is argued that in our case, there
was no endorsement by deceased Balbhir (original
payee) in favour of the respondent and so he is not
holder in due course.
7
11. Second case relied upon by Advocate Shri
Zarekar is of Govind Ram Chanani vs. Latha, 2009 All
MR. (Cri.) Journal 236 which is a ruling of Single
Bench of Karnataka High Court. In the said case,
cheque issued in favour of partnership firm was
dishonoured. It was held that even a person who is
looking after entire business affairs of partnership
firm cannot file complaint without authorization and
therefore the complaint was dismissed. In paragraph 9
of the case, it is observed that only the power of
attorney, agent or a person authorised in writing by
the payee or holder in due course of the cheque, is a
person competent to present the complaint as under
Section 142 of the N.I.Act.
12. The next case relied upon by Advocate for
the Petitioneraccused
is of Single Bench of our High
Court i.e. Roy Joseph Creado vs. Sk. Tamisuddin 2008
(2) Mh.L.J.(Cri.) 118. In that case, the complainant
died without signing and verifying the complaint. The
Respondent was permitted to continue the prosecution
as Special Power of Attorney. However, copy of the
said power of attorney did not show that the
respondent had undertaken the liability to indemnify
the accused persons if the complaint was found to be
8
frivolous or false. Process issued on the basis such
verified statement (of the respondent) was, therefore,
held to be illegal and improper and it was held that
the prosecution against the accused would tantamount
to abuse of the process of law. Learned Single Bench
of this court, after referring to Section 142 of the
N.I.Act, further observed that the said Section
commences with nonobstante
clause and, therefore, it
supersedes the general definition of the word
"complaint" as given in Section 2(d) of the Code of
Criminal Procedure. In paragraph 18, it is held that
the complaint filed by the complainant was defective
because it was not signed by the complainant Smt.
Saira. The defect was curable during her life time.
She could have been asked to sign the complaint. That
was not done. The complaint was verified by the
respondent although, he did not state in clear words
that he was not only Special Power of Attorney holder
but also had full knowledge of the facts in which the
cheque was issued by the applicants in the name of
Smt. Saira as a result of liability to discharge the
legal debt or money due to her. It is also made clear
in paragraph 19 of the judgment, that although
Respondent Sk. Tamsuddin obtained permission to
continue the prosecution as her special power of
9
attorney, he did not seek his substitution as a legal
heir of the deceased. So, the question raised in the
present case was not under consideration of the court.
13. Decision of learned Single Bench of Kerala
High Court in P.K. Koya Moideen vs. G. Haribharan 1996
Cri.L.J. 3153, is cited by Advocate Shri Zarekar for
the petitioner. In said case, Section 9 of the N.I.Act
(definition of holder in due course) was considered.
Cheque was drawn in the name of complainant's father.
Subsequent to death of his father, the complainant
claimed payment in his capacity as executor of the
will, but there was nothing to indicate that he paid
any consideration to his father to claim payment under
the cheque. Genuineness of the will was also to be
adjudicated upon. Under these circumstances, it is
held that the executor of the will could not be termed
as "holder in due course."
14. Then the case of Sivakumar vs. Natrajan 2009
All MR (Cri.) 2165 (SC) was relied upon by Advocate
Shri Zarekar. In paragraph 10 of the judgment, it has
been observed that Section 138 of the N.I. Act being
of penal nature, indisputably it warrants strict
10
construction.
15. Learned Advocate Shri Zarekar also relied
upon the case of Vishw a Mitter v. O.P. Poddar AIR 198 4
S.C. 5, and more particularly he referred to
paragraph 4 of the judgment for proposition that the
Magistrate would be competent to enquire into the
qualification or eligibility of the complainant to
file the complaint and the Magistrate must apply his
mind if there is any provision contrary made in the
statute requiring special eligibility criteria for
filing complaint.
16. The case of Dhariwal Tobacco Products Ltd.
vs. State of Maharashtra (2009) 2 S.C.C. 370 was
relied upon by learned Advocate Shri Zarekar, which is
in respect of alternate remedy. It is held therein
that even if the revision application is barred,
remedy under Articles 226 of 227 of the Constitution
would be available.
17. On the other hand, Shri C.R. Deshpande,
learned Advocate, also relied upon several
authorities. First authority is Ajay Kumar Agrawal and
11
another vs. State of Jharkhand, 2003 (2) Crimes 226.
In that case, private complaint was filed against the
petitioner Ajay Kumar and another for having committed
offences punishable under Sections 420 and 468 of
I.P.C. as also under Section 138 of the N.I. Act.
The complainant therein died and the question,
therefore, was whether after the death of the
complainant, prosecution could have been continued. In
paragraph 21 of the judgment,it has been observed that
from the complaint it was apparent that the
complainant himself was the owner of a business house
dealing in mica and he/his company sold a huge amount
of mica to the accused persons worth Rs.7,30,000/=.
It was further observed that the right to receive the
amount by his business house could not be frustrated
by technicalities of the definitions as recorded in
the Negotiable Instruments Act because his own
business house also must be deemed to be beneficiaries
of the cheques and therefore his son will also be
deemed to be the "holder in due course.". In that
case, paras 5 and 7 show that cognizance of complaint
was taken by Addl.Chief Judicial Magistrate, Koderma
by his order dated 19.2.2001 and the complainant
expired on 5/6.6.2001. So, issue raised in our case
was not under consideration in that case.
12
18. Next case relied upon by learned Advocate
Shri Deshpande is Punjab & Sind Bank vs. Vinkar
Sahakari Bank Ltd. 2001 (4) ALL MR 474 (S.C.). In that
case, it was the submission of the accused that the
complainant was not the holder in due course unless
endorsement was made on the instrument in the manner
prescribed under Section 50 of the N.I. Act. While
dealing with this issue in paragraphs 21 to 23, it is
observed that Section 142 of the N.I. Act envisages a
complaint to be made in writing "either by the payee
or the holder in due course of the cheque, as the case
may be. It was further observed that Section 8 of the
Act defines the "holder" as any person entitled in his
own name to the possession of the cheque and to
receive or recover the amount due thereon from the
parties thereto. It was held that the complainantbank
was well within its right to possess the cheque and
to receive or recover the amount covered by the
instrument. In paragraph 22, reference was made to
Section 118(g) of the Act which mandates that until
the contrary is proved the holder of a negotiable
instrument shall be presumed to be a holder in due
course and thus there is no escape for the Court from
drawing such presumption. It was held in paragraph 23
that it was undisputed that the complainantcompany
13
was the holder of the instrument in its own right and
as such it could be holder in due course also until
the concerned party adduces evidence to rebut the
presumption.
19. So, it was argued by learned Advocate Shri
Deshpande before this court that in the facts of the
present case, the complainant being the son of the
deceased payee, should be deemed to be holder of
instrument in due course until that presumption is
rebutted under Section 118(g) of the N.I. Act.
20. Shri Deshpande, learned Advocate for the
respondentcomplainant
heavily relied upon Division
Bench ruling of Kerala High Court in Chandra Babu vs.
Remani 2003 (2) DCR 347. In that case, in paragraph
5, it is held as follows:
"5. Another important statutory provision
in this regard is S.53 which is as follows:
"53. Holder deriving title from holder in
due course. A holder of a negotiable
instruments who derives title from a holder
in due course has the rights thereon of that
holder in due course.
Therefore, a holder deriving title from the
holder in due course has all the rights of a
holder in due course. Therefore, legal
representative of a holder in due course has
14
all the rights of the holder in due course.
Here, in this case, if the original payee is
a holder in due course, his representative
has all his rights. Therefore, rights under
Ss. 138 and 142 are applicable to the legal
representative also if he derives title from
the holder in due course."
In aforesaid case, references were also made to other
rulings of the Kerala High Court and at the end of
paragraph 9, following observations are made.
"9...............................Apart from
the above, in this case, complainant holds
the cheque after the death of the payee as a
legal heir and she is entitled to possess
the same in her own name and in view of S.
53, being a legal heir, she is a holder in
due course and he can get a full discharge.
The party was free to pay the amount to her
and to get back the cheque. In view of S.53
of the Act, legal heir of the payee or
holder in due course can maintain a
complaint under S.138 of the Act."
Relying on this case, it is argued that this writ
petition has no merit and the cognizance by the
Magistrate of the complaint lodged by the respondent
as heir of deceased Payee Balbhir is tenable and there
is no bar of Section 142 (a) of the N.I.Act.
21. Another case cited by Advocate Shri
Deshpande for respondent is of Single Bench of Kerala
High Court Smt. Bhagava vs. M.s Sri Kadasiddeshwara
15
Trading Company and another 2004 (1) Crimes 701. In
the said case, payee had died before presenting cheque
for encashment and the cheque was therefore presented
by his wife and on bouncing of the cheque, after
completing formalities, she had filed complaint. In
the facts of the said case, it is held therein that on
death of payee, his legal heirs stepped into shoe of
payee for all practical purposes and such legal heir
could also file and prosecute complaint and the
impugned order dismissing the complaint was set aside.
22. Ruling of Single Bench of Karnataka High
Court in Ashok Kumar v. Dr. T.R. Bhageerathi 2009
Cri.L.J.221 is relied upon by Advocate Shri Deshpande,
wherein it is held in paragraph 9 as under:
"9. The contention of the learned counsel
for the petitioner that the legal
representatives of payee or the holder in
due course are not entitled to file a
criminal petition under Section 142 of the
Act is unacceptable to me. Section 8 of the
Act defines "Holder" means any person
entitled to his own name to the possession
thereof and to receive or recover the amount
under the instrument from the drawer.
Therefore, the legal representatives of a
payee or holder in due course are entitled
to the legal possession of the instrument
and further to receive and recover the
amount covered under the instrument from the
drawer. Section 118(g) of the Act specifies
16
that holder of a negotiable instrument is a
holder in due course. Therefore, the legal
representatives of deceased payee or holder
in due course are entitled to file a
complaint under Section 146 of the Act for
offence punishable under Section 138 of the
Act."
The Court placed reliance on the case of Punjab & Sind
Bank vs. Vinkar Sahakari Bank Ltd. (supra) and at the
same time observed that facts were different. It is
argued by learned Advocate of the petitioner that
Section 118(g) only raises a presumption that holder
of negotiable instrument is holder in due course.
However, in this case, respondent claims to be heir of
deceased payee. It is not his case that for
consideration he became the possessor of cheque issued
to his father. Moreover, it is not case of a bearer
cheque.
23. Advocate Shri Deshpande also relied upon the
case of M.M.T.C. Ltd. vs Medchl Chemicals & Pharma (P)
Ltd. AIR 2002 SC 182. In that case, the Supreme Court
considered Sections 138, 139 and 142(a) of the N.I.Act
and held that the complaint must be made by payee and
in case the complaint on behalf of company if filed by
person not initially authorised, such defect can be
subsequently cured by sending person competent to
17
represent company.
24. The above said case law particularly
observations in case of Roy Joseph Creado (supra)
indicate that once complaint is filed and verification
of complainantpayee
or complainantholder
in due
course is recorded, his subsequent death will not
prevent his legal heir from continuing the complaint.
However, we will have to see what would be position if
payee or holder in due course of cheque dies prior to
that. If such payee or holder in due course dies
after expiration of time of payment mentioned in the
notice required by Section 138 of the N.I.Act, but
before filing of complaint, question would be whether
sole heir or one of the heirs having authority of
other heirs can file complaint and give verification
on ground that by succession he/they have entered into
shoes of deceased payee/holder in due course. Another
contingency arises where payee/holder in due course
dies before expiration of period of payment mentioned
in the notice under Section 138 of the N.I.Act as is
the case before us. Here, moot question is whether
person claiming to be sole legal representative or one
of the legal representatives can on payment of amount
due under cheque, give valid discharge to drawer. If
18
not, can it be said that by not making payment to such
person, the drawer commits the offence. This requires
detail analysis of position of law.
25. It is argued on behalf of the petitioner
that the present respondentcomplainant
alone is not
the heir of the deceased payee and as such he could
not have issued notice to demand amount of cheque when
the cheque in the name of his father was dishonoured.
He could not have filed complaint under the N.I. Act
as he was neither the payee nor holder in due course.
26. It may be noted that the cheque is a
negotiable instrument and also a valuable security and
thus forms part of the movable property of the
deceased which can be inherited or succeeded to by
the legal heirs of the deceased. As per Section 138
of the Negotiable Instruments Act, where any cheque
drawn by a person on account maintained by him with a
banker for payment of any amount of money to another
person from out of that account for the discharge, in
whole or in part, of any debt or other liability, is
returned by the bank unpaid, either because of the
amount of money standing to the credit of that account
is insufficient to honour the cheque or that it
19
exceeds the amount arranged to be paid from that
account by an agreement made with that bank, such
person shall be deemed to have committed an offence.
The payee is expected to issue notice calling upon the
drawer concerned to pay the amount under the cheque
within 15 days and in case such amount is not paid
within prescribed time, payee or holder in due course
of the cheque may file complaint as per Section 142 of
the N.I.Act. Section 142 (a) which is relevant for
our purpose, is as follows:"
142. Cognizance of offencesNotwithstanding
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."
Payee is defined in Section 7 of the N.I. Act as the
person named in the instrument, to whom or to whose
order the money is by the instrument directed to be
paid. Section 9 defines the "holder in due course" as
follows:
20
"9. 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.
27. The present Respondentcomplainant
is not
the person named in the instrument nor he 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 Respondentcomplainant.
So, it is not
that the amount under the instrument was directed to
be paid to him. The holder in due course is defined
as the person who for consideration is entitled to
the possession of the bearer cheque or payee or
endorsee thereof. It is submitted that as a legal
representative of the deceased payeefather,
the
respondentcomplainant,
is entitled to possession of
the valuable security/movable property left by his
deceased father and also to receive or recover the
amount thereunder. It is not disputed that the
complainant could have filed a civil suit on the basis
of the dishonoured cheque for recovery of the amount
21
stated in the said cheque. The question is whether
the respondentcomplainant
could file complaint in
view of specific wording of Section 142(a). It is
argued that the respondent complainant has not become
possessor of the property for consideration, but it is
because of death of his fatherpayee.
He is also not
endorsee.
28. If we consider the scheme of Chapter XVII of
the N.I.Act regarding penalties in case of dishonour
of certain cheques for insufficieny of funds in the
account, it is clear that under proviso (b) to Section
138 of the N.I.Act the payee or the holder in due
course of the cheque, as the case may be, is to make a
demand for the payment of the said amount of money by
giving a notice in writing, to the drawer of the
cheque, within [thirty] days of the receipt of
information by him from the bank regarding the return
of the cheque as unpaid. As per proviso (c), if the
drawer of such cheque fails to make payment of the
amount due under the cheque to the payee or to the
holder in due course as the case may be within fifteen
days of receipt of notice, then the offence is
complete. It may be noted that this requires that the
person demanding the amount must have right to demand
22
the money and secondly, he must be in a position to
give full discharge to the person who is to make the
payment. If a person to whom payment is to be made is
not in a position in law to give full discharge and
indemnity for payment made, nonpayment
to him cannot
be an offence.
29. We may refer to certain provisions of the
Succession Act in this respect. Section 211 speaks
that the executor or administrator, as the case may
be, of a deceased person is his legal representative
for all purpose, and all the property of the deceased
person vests in him as such. Section 273 of the
Succession Act is regarding conclusiveness of probate
or letters of administration. As per this section,
probate or letters of administration shall have effect
over all the property and estate, movable or
immovable, of the deceased, throughout the [State] in
which the same is or are granted, and shall be
conclusive as to the representative title against all
debtors of the deceased, and all persons holding
property which belongs to him, and shall afford full
indemnity to all debtors, paying their debts and all
persons delivering up such property to the person to
whom such probate or letters of administration have
23
been granted. Similarly, under Section 381, succession
certificate with respect to debts and securities
specified therein, is conclusive as against person
owing such debts or liable on such securities and
affords full indemnity to all persons as regards all
payments made or dealings had, with the person to whom
the certificate is granted. In other words, only in
case the legatee or heir is armed with succession
certificate or probate or letters of administration,
he would be entitled to give full discharge and
indemnity to the drawer of the cheque. Unless he can
give such indemnity it cannot be said that he has
authority to issue notice and non payment of amount
mentioned in the notice within 15 days is an offence.
30. By demise of payee itself, it cannot be said
that any of the heirs or legatees get right to issue
notice under proviso (b) to Section 138 of the N.I.
Act and then lodge a complaint under Section 142 (a)
of the said Act as if he automatically enters into the
shoes of the deceased payee.
31. When we consider the rights of the heirs or
legatees to recover the amount of debt and securities
of the deceased, we must also recognize right of the
24
debtor and person holding security to have full
indemnity and full discharge in case he makes
payment to such legal heir or legatee. We find such
indemnity and full discharge of liability provided to
maker, acceptor or endorsee respectively of a
negotiable instrument on payment under Section 82 of
the N.I.Act.
32. So in my considered opinion, only a person
who is authorized by succession certificate, letters
of administration or probate granted by the court, is
entitled to call upon the drawer to pay the amount of
dishonour cheque, by issuing notice under proviso(b)
of to Section 138 of the N.I.Act and he would be
entitled to file complaint under Section 142 of the
Act as he would be then really entering into the shoes
of the deceased payee.
33. In the present matter, it is not the case of
the respondentcomplainant
that he was armed with
either the letters of administration, or probate or
succession certificate.
34. In the result, the writ petition deserves to
be allowed as the complainant is not payee or holder
25
in due course within meaning of law. He has no
authority to demand money and lodge complaint as he
cannot give valid discharge for payment made to him.
Hence, the order of issuance of process against the
petitioner is hereby quashed and set aside. Rule made
absolute accordingly.
pnd/criwp842.09 (P.R.BORKAR, J.)
26



Author : Rahul Singh

Posted On 02 March 2010 at 21:49

Thanx for the judgment.furthur can u tell whether the judgment has been reported in any law journal.


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