1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.1745 OF 2008 Anup Jagdish Agarwal .. Petitioner Versus Mrs.Nilkunj Lalit Shah and Ors. .. Respondents WITH CRIMINAL WRIT PETITION NO.1746 OF 2008 Ranjana Jagdish Agarwal .. Petitioner Versus Mrs.Nilkunj Lalit Shah and Ors. .. Respondents WITH CRIMINAL WRIT PETITION NO.1747 F 2008 Rahul Jagdish Agarwal .. Petitioner Versus Mrs.Nilkunj Lalit Shah and Ors. .. Respondents WITH CRIMINAL WRIT PETITION NO.1748 OF 2008 Mrs.Mohini Jagdish Agarwal .. Petitioner Versus 2 Mrs.Nilkunj Lalit Shah and Ors. .. Respondents Mr.R.K.Parmar with Mr.A.P.Kulkarni for petitioners Mr.Madhav Jamdar for respondent Nos.1 to 4 Mrs.R.V.Newton, APP for State. CORAM : S.C.DHARMADHIKARI, J. DATE : 22nd January 2010. ORAL ORDER:- 1] In these petitions the original accused have approached this Court to challenge an order of issuance of process at the instance of complainants who are respondent Nos. 1 to 4 in these petitions. 2] The process has been issued on a complaint alleging commission of offences punishable under section 138 of the Negotiable Instruments Act, 1881 (the Act for short). 3] Two contentions have been raised by the learned Counsel appearing for the petitioners to challenge issuance of process. It is firstly submitted that the original complainants, respondent Nos. 1 to 4 are the 3 legal heirs of late Mr.L.N.Shah who died on 18th January 2007. It is alleged in the complaint that the petitioner had issued cheques towards repayment of loans taken from the late Shah. After inviting my attention to the details of the said cheques, it is contended that the case of the petitioner is that after the death of late Shah they had gone through certain documents, bank statements etc. They found that late Shah had advanced various sums to the petitioners and other family members of the petitioners from time to time. In such circumstances and for due repayment of the loan, the cheques in question had been issued by the present petitioner. The complaint proceeds to allege that the cheques were deposited by the complainants in the bank and they were dishonoured. Thereafter, the notice under section 138-B was issued by the complainants. However, as the petitioner failed to comply with the same, the subject complaints have been filed. 4] It is urged that the learned Magistrate on perusal of the complaint and the verification statement directed issuance of process. Aggrieved by that order revision applications have been filed before the Court of Sessions, Pune. However, learned Dist. And Sessions Judge rejected the revision applications. 4 5] It is contended that when the cheques have been issued allegedly in favour of late Shah and he having expired on 18th January 2007, the respondents/ complainants deposited the cheques in the account of Mr.L.N.Shah (deceased) in the month of June 2007. The cheques were dishonoured with intimation referred to drawer vide various bank memos dated 5th June 2007. It is alleged that these cheques were given quite some time back and it is only the late Shah who could have filed the complaint during his life time. The present complainants could not have, claiming to be legal heirs of the late Shah, deposited the cheques in his account and, thereafter, proceeded to file a complaint on the basis of their dishonour. It is urged that once the payee died before presenting the cheque for payment, then, his legal representatives could not have filed the complaint. The complaint, therefore, was ex facie not maintainable. Upon such complaints, no process could have been issued. 6] The next contention is that assuming without admitting that the complaint is maintainable at the instance of the original complainants, yet, taking into account the date of cheques, date of presentation, date of dishonour, the complaint is not within the period of limitation and 5 deserves to be dismissed on that ground as well. On such a complaint, the process could not have been issued. Therefore, looked at from any angle, the learned Counsel for the petitioners submits that the order issuing the process and that of the revisional court must be set aside so also the complaint be quashed as it is an abuse of the process of the Court. 7] Mr.Jamdar learned Counsel appearing on behalf of original complainant submits that the complaints in this case are maintainable. He submits that the essential ingredients constituting the offence under section 138 of N.I.Act and the pre-conditions provided in law are all satisfied in this case. The cheques have been presented by the complainants. They have received the memo of dishonour. They have issued the statutory notice and, therefore, they could have filed the complaint. The issue as to whether they were entitled to succeed to the estate of late Shah is something which need not detain this Court nor the trial court. That is a matter which must be decided at the trial. In any event, that is not an issue which can be decided in criminal proceedings. 8] It is submitted by Mr.Jamdar that the complaint is maintainable at 6 the instance of a payee or holder in due course. In this behalf, my attention is invited to section 142 of the Act and more particularly sub- clause (a) thereof. The complaint in this case is in writing and it is made by the payee or as the case may be by holder in due course of the cheque. Mr.Jamdar invited my attention to the other provisions of the Act and more particularly definition of the terms, “payee”, “holder”, “holder in due course”. He invited my attention to section 14, 29, 78 and 118 of the Act. He submits that all these concepts are in the very enactment which contains sections 138 to 147. Once the N.I.Act recognises these concepts, then, the learned Magistrate was right in taking them in to consideration and applying them for the limited purpose of finding out as to whether the complaint is maintainable. Mr.Jamdar submits that the sessions Judge was in no error in following a decision of the Kerala High Court and concluding that the order issuing process is in accordance with law. For all these reasons, he submits that these petitions be dismissed. 9] With the assistance of the learned Counsel appearing for parties, I have perused the petitions and all annexures thereto, including the complaints. In the complaints the original complainants have stated that the first comlainant is the wife of late Shah, complainant Nos. 2 to 4 are 7 sons of late Shah. It is stated that deceased Shah died intestate at Pune on 18th January 2007. These complainants are the only legal heirs of Shah. After his death, they went through his papers and documents, bank statements etc., and were surprised to see that he had advanced certain amounts to accused as loans and in due repayments thereof the cheques drawn in favour of late Shah were issued. The complaint proceeds on the basis that being legal heirs of late Shah, complainants are entitled to recover and encash the amounts under these cheques. Therefore, the cheques were presented and they were returned with the remarks “referred to drawer”. Thereafter, they issued a demand notice but the accused failed and neglected to pay the sums demanded and that is how complaint has been filed. In paras 6 and 7 of the complaint, this is what is stated:- “6. The complainant says that an amount of Rs. 13,90,940/- is due and payable by the accused to the late Shri L.N.Shah. This is evidenced by the bank entries and the cheques given by the accused. The complainant submits that there is a presumption in law that the cheques were given towards repayment of a debt/ liability. The accused has given cheques for Rs.13,90,940/- only as the same is due and payable by the accused. This is a legally enforceable debt/ liability and the complainant is entitled to recover the same by filing this criminal complaint against the accused. The complainant No.2 has been duly authorised by a power of attorney to receive the dues of late Shri L.N.Shah and in 8 default, to take all necessary legal action for and on behalf of the complainant Nos. 1, 3 and 4.” “7. The complaint is filed by the legal heirs of the deceased L.N.Shah, namely the wife and three sons. The deceased L.N.Shah was named as payee on the instrument. The deceased L.N.Shah died intestate, that is without making any will. Taking into consideration the facts and circumstances of the case and considering the statutory provisions, the heirs of the deceased L.N.Shah step into the shoes of the payee for all practical and legal purposes. It is settled law, that the death of the complainant is of no legal consequence and the complaint does not ipso facto gets terminated or abated on the death of the complainant. It is, therefore, clear that it makes no difference whether the complaint has been filed by the legal heirs of the payee or whether the complainant dies during pendency of the complaint. It is thus, clear that the complaint is filed by the heirs of the deceased, precisely in accordance with the statutory provisions of the law.” 10] The contention raised before me is that the order issuing process in such a complaint is ex facie erroneous and illegal. I am unable to accept this contention for more than one reason. Firstly, the matter must be decided on the reading of the complaint and whether the complaint raised as a whole discloses commission of any offence punishable under section 138 of the Act. That a perusal of the complaint in this case would denote that the allegations are made on the basis that the complainants succeed to the estate of late Shah as his legal heirs and they have right to present the cheques and receive payments thereunder. Once, such allegations are 9 made in the complaint, then, the Court is not required to probe into at this stage as to whether the heirs succeed to the estate of the deceased on the basis of intestate succession or otherwise. That is not a germane consideration at the stage of issuance of process. The Court must presume that the allegations as made are based on the right to succeed to the estate of the deceased and in this case jointly. 11] The contention that the cheques could have been presented only by late Shah and he was only entitled to the proceeds thereof and thus, only Mr.Shah fulfills the character of a payee is not tenable. At the prima facie stage, the Court was obliged to proceed on the basis that the complaint in this case is made by the payee or as the case may be the holder in due course. Section 142(a) speaks of only presentation of the complaint in writing by these persons. The term “payee” is defined as the person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid. The term “holder of promisory note, bill of exchange or cheque” means any person entitled in his own name to the possession thereto and to receive or recover amount thereof from the parties thereto. Where the note, bill or cheque is lost or destroyed, the holder is the person so entitled at the time of such loss or destruction”. 10 The term 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 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.” There are presumptions which are forming part of the very same statutory scheme. If section 118 of the Act is perused, it is falling under Chapter (XIII), entitled “Special Rules of Evidence”. Section 118 opens with words “until the contrary is proved”. Therefore, until the contrary is proved, it is presumed that the holder of a negotiable instrument is a holder in due course. Section 118 (g) reads thus:- “118(g) That holder is a holder in due course – that the holder of a negotiable instrument is a holder in due course: Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the 11 holder is a holder in due course lies upon him.” 12] Therefore, if the terms referred by me hereinabove, which are referred in section 118(g) are perused together, it is apparent that the presumption would be applicable in the facts of the present case. The persons who have filed the complaints are in possession of the cheques on the basis that they are the heirs of the late Shah. It is their case that on intestate succession, they have succeeded to his estate. Therefore, in the peculiar facts of this case, this presumption would be applicable and until the contrary is proved, it cannot be held that the complaint on the face of it was not maintainable in law. 13] It is not as if this issue has not been considered by any court earlier. The reference made by the learned Dist. And Sessions Judge to the decision of the Kerala High Court is appropriate. In a decision (Smt.Bhagava Vs. M/s.Sri Kadasiddeshwara Trading Company & Anr.) Criminal Revision Petition No.789 of 2001 decided on 1st December 2003, the learned Single Judge in somewhat similar factual position held thus:- 12 “9. In the decision reported in 1997 Company Cases Kerala 399 (supra), the learned Judge of Kerala High Court had held that the executor of the Will cannot be stated to be the holder in due course as there was nothing to show that he had paid the consideration to the payee. On careful perusal of the said decision, it is clear that the complainant had been claiming his right on the basis of a will and as a holder in due course. The learned Sessions Judge had held that the complainant himself was in possession of the instrument for consideration and as there was no material to show the passing of consideration, the complaint came to be quashed. But, in the case on hand, the complainant has been claiming to be the legal heir of the deceased payee. By statutory provisions of the Negotiable Instruments Act, it is seen that the payee is a person named in the instrument, to whom or in whose favour the money is directed to be paid. In the case on hand, the complainant is none other than the wife of the deceased payee. Having regard to the facts and circumstances of the case and in view of the said statutory provisions, this Court is of the opinion that the person who claims as legal heir of the payee 13 cannot be termed as holder in due course in the strict sense, but in the opinion of this Court, he steps into the shoes of the payee and he will be the payee for all practical purposes. Under these circumstances, the ratio laid down in the said decision cannot be pressed into service to spell out a case in favour of the accused.” “12. Having regard to the factual aspects and the settled principles of law in this regard, in the opinion of this Court, on the death of the payee, his legal heirs steps into the shoes of the payee for all practical purposes and such a person can also file and prosecute the complaint after completing the legal formalities. It is also necessary to mention that it would be incumbent upon the complainant to prove that the complainant is the legal representative of the deceased payee, in the event of accused disputing the same. In the case on hand, the payee held died and the wife of the payee, as the legal heir, had presented the cheque in question and on the cheque being dishonoured legal notice had also been issued and, thereafter, the proceedings had been initiated under 14 section 138 of the NI Act.” 14] The Division Bench of Kerala High Court in a decision reported in 2003 (2) Kerala Law Times 750 (Chandrababu Vs. Remani) Criminal Misc. Case No.78 of 2000 decided on 4th April 2003, after noticing the relevant statutory provisions and more particularly the definitions referred by me above, including section 75 and 78 of the Act concluded thus:- “3. Now, we will consider the definition clauses “Payee” is defined under section 7 of the Act as follows:- “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 in due course” is defined in Section 9 as follows:- “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 order, before the amount mentioned in it became payable, and without having sufficient 15 cause to believe that any defect existed in the title of the person from whom he derived his title.” “The contention raised by the petitioner in this case is that, admittedly, complainant is not the payee of the cheque. She filed the complaint as a legal representative. Legal representative of the payee is not a holder in due course. The complainant in this case came to the possession of the cheque only as a legal heir of the deceased and not by paying consideration to him or by endorsement of the cheque to him by the original payee. Section 75 of the Act is also important in this matter. Section 75 of the Act reads as follows:- “75. Presentment by or to agent, representative of deceased, or assignee of insolvent:- Presentment for acceptance or payment may be made to the duly authorised agent of the drawee, maker or acceptor, as the case may be, or, where the drawee, maker or acceptor has died, to his legal representative, or, where he has been declared an insolvent, to his assignee.” 16 The above section only provides that if the maker of the cheque is dead, payment can be demanded from the legal representatives of the drawee, maker or acceptor. But, heading of the section is very wide and it shows presentment of the negotiable instrument can be made by the representative of the deceased also. Even though under the above section, presentment can be made to the legal representative of the maker or drawee of the cheque, legal heir of the maker or drawee of the cheque is not liable for criminal action under section 138 of the Act.” “4. Section 78 provides to whom payment should be made. Unlike section 138, section 78 says that if the amount is paid to the holder of the instrument, there will be sufficient discharge of liability. “Holder” is defined in Section 8 as follows:- “The ‘Holder” of a promissory notice, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover them, amount due 17 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”. Person entitled in his own name to the possession thereof only means that the person who is legally entitled to the possession of the cheque. Complainant in this case came to the possession of the cheque not by fraud or theft. Being a legal representative, she is legally entitled to hold the cheque.” “5. Another important statutory provision in this regard is Section 53 which is as follows:- “53. Holder deriving title from holder in due course. A holder of a negotiable instrument 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 all the rights of the holder in due course. Here, in this case, if the original 18 payee is a holder in due course, his representative has all his rights. Therefore, rights under sections 138 and 142 are applicable to the legal representative also if he derives title from the holder in due course.” 15] These views have my respectful concurrence. Moreover, nothing contrary to brought to my notice. In my view, in the light of this statutory scheme and the decisions referred above, it can be safely concluded that a complaint can be filed by the legal representatives of the payee and merely because it is so filed, it cannot be held that it is not maintainable. Once, the complaint can be held to be maintainable, then, any larger issue need not be gone into at this prima facie stage. Whether the presumption is applicable or whether burden has been discharged by the accused by leading evidence to the contrary are all matters which must be gone into and decided at the trial. Merely because in a petition challenging the issuance of process, all pleas of the aforereferred nature are raised, does not mean that the presumption is not available to the complainants at this stage. The stage at which presumption can be held to be rebutted is not this prima facie stage of issuance of process. It is not as if, the accused will have no opportunity to prove to the contrary. The 19 complaint is yet to be tried. However, the order issuing process on the complaint cannot be faulted on the ground raised in this petition. The first contention, therefore, must fail. 16] As far as second contention is concerned, in my view, this involves going into the factual details, not only with regard to the date of cheques, their presentation, their dishonour and the date of demand notice but evidence will have to be led by parties to demonstrate and prove that the complaint is within the period of limitation or not. On the bare and bald assertions in this petition and the grounds raised in the memo of the revision petition before the sessions court, it will not be possible to conclude that the complaint is not within limitation. Ultimately, these are mixed questions and no conclusive findings can be rendered at this stage. The scheme of Chapter XVII if taken into account, such factual question cannot be gone into in the facts of this case. In the peculiar facts of this case and on a bare reading of the complaint, it is not possible to conclude that the same is not within the period specified in law. That is a matter which must be gone into and considered at the trial. 17] In the result, only two contentions having been raised before me 20 and they being answered in the negative and against the petitioners, all these petitions must fail. They are accordingly dismissed. However, these observations would not influence the trial court while trying the complaint, which must be decided on its own merits and in accordance with law. All pleas of both sides on merits are kept open. (S.C.DHARMADHIKARI, J)