Case Note & Summary
The petitioners, accused Nos. 3 and 4 in C.C. No. 25456/2009 on the file of XIII ACMM, Bangalore, filed two petitions under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of the proceedings initiated against them. The proceedings arose from a complaint filed by the respondent, Hasham Investments and Trading Company Pvt. Ltd., under Section 138 of the Negotiable Instruments Act, 1881. The petitioners were directors of Subhiksha Trading Service Limited. The court examined the complaint and found that the complainant was not the payee or holder in due course of the cheque in question. The court held that for a complaint under Section 138 of the Negotiable Instruments Act to be maintainable, the complainant must be the payee or the holder in due course of the cheque. Since the respondent did not satisfy this requirement, the complaint was not maintainable. Consequently, the court allowed the petitions and quashed the proceedings in C.C. No. 25456/2009.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Maintainability of Complaint - Complaint filed by a company which was not the payee or holder in due course of the cheque - The court held that the complaint is not maintainable as the complainant must be the payee or holder in due course under Section 138 of the Negotiable Instruments Act, 1881 - The proceedings were quashed (Paras 1-5).
Issue of Consideration
Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable when the complainant is not the payee or holder in due course of the cheque?
Final Decision
The petitions are allowed. The proceedings in C.C. No. 25456/2009 on the file of XIII ACMM, Bangalore are quashed.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- maintainability of complaint
- holder in due course
- payee
- quashing of criminal proceedings
- Section 482 CrPC
Case Details
2014 LawText (KAR) (07) 41
Criminal Petition No. 627 of 2010 and Criminal Petition No. 628 of 2010
K. Shashi Kiran Shetty for petitioners, Rajendra Holla for respondent
Renuka Ramnath and Rajeev Bakshi
Hasham Investments and Trading Company Pvt. Ltd.
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Nature of Litigation
Criminal petitions under Section 482 CrPC seeking quashing of proceedings under Section 138 of the Negotiable Instruments Act, 1881.
Remedy Sought
Petitioners sought to set aside the order dated 7th November 2009 passed by XIII ACMM, Bangalore in Complaint No. 25456/2009 and to quash the complaint and dispense with their personal appearance.
Filing Reason
The petitioners, accused Nos. 3 and 4, contended that the complaint under Section 138 of the Negotiable Instruments Act was not maintainable as the complainant was not the payee or holder in due course of the cheque.
Previous Decisions
The XIII ACMM, Bangalore had taken cognizance and issued process in C.C. No. 25456/2009.
Issues
Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable when the complainant is not the payee or holder in due course of the cheque?
Submissions/Arguments
Petitioners argued that the complaint is not maintainable as the respondent is not the payee or holder in due course of the cheque.
Respondent argued in support of the complaint.
Ratio Decidendi
A complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable only if the complainant is the payee or the holder in due course of the cheque. If the complainant does not satisfy this requirement, the complaint is not maintainable and the proceedings are liable to be quashed.
Judgment Excerpts
Admittedly, the proceeding in C.C.No.25456/2009 is pursuant to a complaint filed by respondent herein in PCR No.19281/2009 for the offence punishable under Section 138 of the Negotiable Instruments Act.
The court held that the complaint is not maintainable as the complainant is not the payee or holder in due course of the cheque.
Procedural History
The respondent filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 in PCR No. 19281/2009, which was registered as C.C. No. 25456/2009 by the XIII ACMM, Bangalore. The petitioners, accused Nos. 3 and 4, filed Criminal Petition No. 627/2010 and Criminal Petition No. 628/2010 under Section 482 CrPC seeking quashing of the proceedings. The High Court allowed the petitions and quashed the proceedings.
Acts & Sections
- Negotiable Instruments Act, 1881: 138
- Code of Criminal Procedure, 1973: 482
