@JUDGMENTTAG-ORDER
Sreedhar Rao, J.@mdashPetition filed u/s 482 Cr.P.C. for quashing the proceedings in C.C. 877/2002 on the file of JMFC, Hospet arising out a private complaint filed u/s 200 Cr. P.C. in P.C.No. 60/2002.
2. The petitioners are the accused before the Trial Court. The respondent filed the private complaint alleging dishonour of the cheque issued by the petitioners for a sum of Rs. 7,25,000/- drawn on Federal Bank, Bangalore. The Cheque was sent through Syndicate Bank, Kambli Branch. The Cheque came to be dishonoured with an endorsement as "insufficient funds." A statutory notice is issued within 15 days of dishonour and within one month from the date of service, private complaint is filed by the respondent. The accused have appeared before the Trial Court and now in this petition, challenged the legality of proceedings.
3. In respect of a development of lay out and allotment of plots to several persons, disputes arose. In that connection, an agreement was entered into between the intending purchasers of the plots and the petitioners. The parties agreed that towards full and final settlement of the claims, a cheque of Rs. 7,25,000/- came to be issued in favour of the Respondent as discharge of the liabilities of the purchasers from whom the petitioners had collected the amount. In view of the said admitted facts, it is contended that provisions of Section 138 would not attract. There is no valid consideration flowing from the payee and there is no debt or enforceable liability as against the respondent-payee. Hence, contended that the complaint is without basic requisites. In this regard, the Counsel relied on the ruling of the Division Bench of Andhra Pradesh High Court in
51. Section 138 is not couched in precise language. Apart from being vague, it is likely to be misinterpreted in a manner different from what was intended by the law making body, and this is because of the words "payment of any amount of money to another person" appearing in the main enacting clause. The words "another person" are not explained. This at the first blush gives an incorrect impression that the words "another person'' means only a "payee" and that the sweep of the offence is confined to the drawer and the payee. We, therefore, hold that both the payee and holder in due course are covered by the expiration "another person" but not a mere holder of endorsee without consideration.
52. The rebuttable presumption u/s 139 operates only in favour of the payee or a holder in due course but not in favour of a person, who, without consideration, became the holder of the cheque.
4. In the decision of the Andhra pradesh High Court, the words any other person has been interpreted to mean, a drawer, a payee or an holder in due course but not a mere holder or endorsee without a consideration. The words holder in due course and endorsee have definite legal connote under the Negotiable Instruments Act. Sections 8, 9 and 15 define the holder, holder in due Course and indorsement in the following words:
"8 ''Holder'': - The ''holder'' of a promissory note, bill of exchange on cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due 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.
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.
15. Indorsement:- When the makers holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or lace thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the "indorser".
(Underlining emphasised by me)
5. In Civil jurisprudence the consideration forms one of the essential traits to make the contract lawful and enforceable. The provisions of Section 2(d) of the Contract Act defined consideration in the following words:
"When, at the desire of the promisor, the promisee, or any other person has done or abstained form doing or does or abstains from doing, or promises to do or to abstain from doing, something such act or abstinence or promise is called a consideration for the, promise."
In the Indian Law a past consideration is a good consideration. The consideration can flow from or to a third party. The ambit of words ''consideration, debt, or enforceable liability, holder in due course'' are the well settled and well defined legal concepts sans any ambiguity in civil jurisprudence. The said words employed in Section 138 of the N.I. Act would carry the same meaning as they are understood in the civil jurisprudence and under the N.I. Act.
A person is also called a holder in due course. If he gets into possession a negotiable instrument from the payee by valid endorsement and delivery. Both the bearer and order cheques are negotiable by endorsement and delivery. The payee and endorsee of an order cheque is also a holder in due course within the meaning of the definition. Therefore I respectfully disagree with the view expressed in Division Bench decision of the Andhra Pradesh High Court in Mohan Krishna''s case that the word person would exclude a holder in due course without consideration. Unless the drawee/ holder contests the claim of holder in due course, a drawer cannot challenge his liability. In order to bind the drawer, it is not necessary that there should be interse consideration between drawee and holder in due course. Whatever consideration that holds good for the holder/drawee would equally holds good for the holder in due course.
The observations of the Bombay High Court in
"If it is open to he defendants to challenge the consideration, it is clear that in this case the defendants received no consideration in law at all. The Plaintiff paid Rs. 5,000 to Hariram. It is not the plaintiff''s case that he paid anything at all to the defendant, and in order to succeed it must be established that the payment to Hariram by the Plaintiff was payment to the Defendants, and the Plaintiff can only succeed if it is shown that Hariram was the agent of the defendants for receiving this loan of Rs. 5,000 which he received on 4.2.1949. The learned Judge has found, and we accept that finding, that Hariram was not constituted the agent of the defendants for receiving this sum. If he was not the agent, then the plaintiff gave the sum of Rs. 5,000 to a stranger and that payment cannot be considered as a consideration given to the defendants. Mr. Lulla says that in law consideration need not be given to the defendants themselves: it could be given to any other party at the request of the defendants. There Mr. Lulla is perfectly right, but his difficulty is that it must be established on the evidence that the payment to Hariram was at the request or at the instance of the defendants. It would be perfectly open to the defendants to tell the Plaintiff. "Don''t pay us Rs. 5,000: pay to X, Y or Z." If that request was made, the payment by the plaintiff to X, Y or Z would be as much consideration in favour of the defendants as if the payment had been made to the defendants themselves. But there is not a little of evidence on the record to suggest that the defendants ever requested the plaintiff to make the payment to Hariram or that the plaintiff made this payment to Hariram at the request or at the instance of the defendants. Therefore, it is clear in this case that there was no consideration whatever which in law can be considered as a consideration for the negotiable instrument, in favour of the defendants. If there was no consideration, then it is clear that the defendants are entitled to succeed and to avoid the contract which is embodied in the negotiable instrument in question."
6. In the present facts of the case, it is evident that the cheque was issued in favour of the respondent pursuant to the contract between the parties and towards the liabilities of the intending purchasers from whom the petitioners had collected the amounts. Therefore, whatever liabilities which the petitioner had with the purchasers and in discharge of the same, if cheque is issued, it cannot be said that the cheque is not supported by consideration. A consideration flowing from a third party is also a valid consideration. In that view of the matter, I am unable to agree with the contention of the Counsel for the petitioner that the cheque issued is without consideration and that the provisions of Section 138 would not attract. A legal notice is issued to the Respondent not to present the cheque. Therefore, no action u/s 138 can be maintained and relied on the ruling of the Supreme Court in
7. It is impermissible to invoke the provisions of Section 482 Cr.P.C. for quashing the proceedings when the facts are contentions and disputed. Accordingly, the petition dismissed.
