Babulal Jain vs Kewalchand Jain on 18 September, 2007

Madhya Pradesh High Court Madhya Pradesh High Court Babulal Jain vs Kewalchand Jain on 18 September, 2007 Equivalent citations: I (2008) BC 592, 2007 (4) MPHT 371 Author: B M Gupta Bench: B M Gupta ORDER Brij Mohan Gupta, J. 1. Heard finally at motion stage. 2. This petition is for impugning the criminal proceeding pending against the petitioner in Criminal Case No. 180/07 in the Court of Judicial Magistrate First Class, Aron, Distt. Guna, based on a private complaint filed by respondent under Section 138 of Negotiable Instruments Act (hereinafter referred to as 'the Act') and also the impugned order dated 19th June, 2007 by which the learned Magistrate has taken cognizance against the petitioner. 3. Shri Sharma, for petitioner, has submitted that the cheque in question was not issued by the petitioner to the respondent in his name. The cheque Annexure P-5 was issued by the petitioner to himself while mentioning the word "self in the cheque. He has also submitted that cheque is a bill of exchange under Section 6 of the Act and as defined in Section 5 of the Act, cheque is always to be issued to a certain person. In support Shri Sharma has drawn attention of the Court on an order passed by a Single Bench of Gauhati High Court in Dr. Jiten Barkakoti v. Subrata Patangia and Anr. 2005 Cri.LJ 3598. 4. Shri Jain, for respondent has submitted that the cheque was bearer also, which can be encashed by the respondent/complainant. As per the averment in the complaint and statements of the witness the cheque was given against legal liability of the petitioner. He placed reliance on a judgment of a Single Bench of Punjab and Haryana High Court in Mahesh Goyal v. S.K. Sharma 1997 Cri.LJ 2868. 5. The relevant extracts required to be considered for the present dispute of Sections 5,6,9 and 138 of the Act are as under: 5. "Bill of exchange".- A "bill of exchange" is an instrument in writing containing an unconditional order, singed by the maker, directing a certain person to pay a certain sum of money only to or to the order of, a certain person or to the bearer of the instrument.... 6. "Cheque".- A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.... 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 leaving sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. 138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an 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.... (Emphasis supplied)
Indian Kanoon - http://indiankanoon.org/doc/561085/ 1

Babulal Jain vs Kewalchand Jain on 18 September, 2007

6. While highlighting the averment in Paragraphs 1 and 2 of the complaint and the statement of complainant and Paragraph 2 of the statement of Shital Chand and Shadilal Sharma, Shri Akshay Jain, Advocate for respondent has submitted that the cheque was issued by the petitioner for a debt due on him. This argument was not countered by Shri Sharma for the petitioner. Thus, it appears that the cheque in question was issued by petitioner to the respondent for liability of debt due on him. As provided by Section 9, the respondent becomes holder in due course with regard to cheque in question. The relevant part of the cheque goes- "Pay to....Self....or bearer Rupees One lac fifty thousand only"- Shows that the cheque was bearer also as the words 'or bearer' were not cut by the petitioner. As provided by Section 6 of the Act, a cheque is a bill of exchange and as provided by Section 5 of the Act, bill of exchange is an instrument in writing signed by the maker directing a certain person to pay a certain sum of money only to or to the order of, a certain person or to the bearer of the instrument. It cannot be negated that the respondent is a bearer of the cheque in question and also holder in due course thereof, which was issued against a debt/liability. In view of this, the contention of Shri Sharma that as the cheque was not drawn for any specific person, the provision of Section 138 of the Act do not apply, cannot be sustained. Similar view has been taken by a Single Bench of Punjab and Haryana High Court in the case of Mahesh Goyal (supra). 7. As per the facts of the case of Dr. Jiten Barkakoti (supra), it appears that the cheque in question was not a bearer cheque, as it is in the present case. Hence, the ratio of that order does not help the contention of Shri Sharma in this case. 8. Consequently, the petition being devoid of merits is dismissed.

Indian Kanoon - http://indiankanoon.org/doc/561085/