2021 (11) TMI 277 - HC - Indian Laws

Dishonor of Cheque - misuse of disputed cheque - rebuttal of presumption or not - Section 138 of NI Act - HELD THAT - This Court finds that the respondent no. 2 has specifically averred that the applicant had borrowed money from her through her husband and relatives and for discharging the liability, the disputed cheque was given by the applicant. Much emphasis has been laid on the alleged agreement executed by the applicant and husband of respondent no. 2 to point out that, the cheque was given to husband of respondent no. 2. In the facts of the present case, the respondent no. 2 has specifically averred in the complaint that the money was lent to applicant by her through her husband and relatives. When cheque was presented for the collection, the name of present applicant as payee was written on the cheque. The applicant being a drawer of the cheque, has not denied his signature - It is settled law that once the accused admitted a signature on the cheque in question, the presumption under Sections 118 and 139 of the NI Act is to be drawn in favour of the complainant. Thus, as per Section 118(g) of the NI Act, the holder of cheque is presumed to be holder in due course and accused has to prove that the cheque was not issued to the complainant. The present complaint is maintainable by the payee of the cheque, i.e. respondent no. 2. Whether she is not holder in due course of the cheque in question, is an aspect which cannot be pre-judged at this initial stage and is required to be considered after the evidence is recorded. Defence regarding legally enforceable liability or debt cannot be examined at this stage. The issue raised by the applicant in the present petition requires evidence, which cannot be appreciated, evaluated or adjudged by the High Court under the powers vested under Section 482 of the Code. There is no any error or infirmity in the view taken by the revisional court as well as the trial Court while issuing the process - Petition dismissed.

Summary

Issues:
Quashing of order passed by Additional Sessions Judge and Chief Metropolitan Magistrate, and the criminal case pending before the Metropolitan Magistrate.

Analysis:
The applicant filed a petition under Article 226 of the Constitution of India seeking to quash the order passed by the Additional Sessions Judge and the Chief Metropolitan Magistrate in a criminal case related to dishonour of a cheque. The respondent had filed a complaint under the Negotiable Instrument Act against the applicant for non-payment of a cheque. The applicant contended that the complainant was not a holder in due course as defined under Section 9 of the Act. The applicant argued that the cheque was given to the complainant's husband and not to her directly, alleging misuse of the cheque by the complainant. The applicant relied on a previous case to support the claim that mere possession of the cheque is not sufficient to establish holder in due course status.

The court noted that the complainant had averred in the complaint that the money was lent to the applicant through her husband and relatives, and the cheque was given by the applicant to discharge the liability. The court referred to Section 9 of the Act which defines a holder in due course as a person who possesses the instrument for consideration before it becomes overdue. The court highlighted that once the accused admits the signature on the cheque, the presumption under Sections 118 and 139 of the Act favors the complainant. The court cited a previous judgment stating that the holder of the cheque is presumed to have received it in discharge of a debt or liability.

The court emphasized that at the initial stage, the issue of whether the complainant is a holder in due course cannot be prejudged and requires evidence to be considered after recording. The court held that the defense regarding a legally enforceable liability or debt cannot be examined at this stage. The court distinguished a previous case where the payee was different from the present case's complainant. Ultimately, the court found no error in the view taken by the revisional court and the trial court in issuing the process. The court dismissed the petition, allowing the applicant to raise the plea before the trial court at the appropriate stage.