2024 (10) TMI 887 - HC - Indian Laws

Dishonour of cheque - acquittal of the accused - cheque was given as collateral security or not - HELD THAT - This Court has perused the impugned judgment and order of acquittal passed by the Trial Court and the decisions cited at the Bar. Considering the facts of the case, it reveals that the cheque in question was issued in favour of father of the complainant towards the debt and during the course of clearance of the cheque, the drawee was passed away and, therefore, the complainant posed himself as payee or the holder in due course issued notice as provided under Section 138 of the N. I. Act and the offence under Section 138 of the N.I. Act cannot be attributed. Therefore, the Trial Court has dealt with the contentions raised by the respective parties and rightly passed the impugned judgment and order of acquittal. The Trial Court, after considering the evidence and the relevant decisions, has rightly passed the impugned judgment and order of acquittal and hence, no interference is required to be called for. This Court is complete agreement with the findings recorded by the Trial Court and this Court does not find any infirmity and perversity in the impugned judgment and order of the Trial Court. Under such circumstances, the present appeal is devoid of merits and the same deserves to be dismissed.

Summary

Issues:
Appeal against acquittal under Section 378(4) of CrPC, 1973 - Cheque dishonored - Complaint under Section 138 of NI Act - Legal heirs' right to file complaint after payee's death - Consideration for the cheque - Holder in due course status of complainant.

Analysis:
The appellant, the original complainant, filed an appeal under Section 378(4) of the Criminal Procedure Code against the acquittal of the respondent-accused by the Trial Court in a case involving a dishonored cheque. The complainant alleged that the accused borrowed Rs. 1,00,000 as a loan and issued a cheque in favor of the complainant's deceased father. After the father's death, the complainant deposited the cheque, which was returned due to "account closed." The complainant then sent a legal notice under Section 138 of the Negotiable Instruments Act (NI Act) and filed a complaint when the amount was not returned.

The appellant argued that the Trial Court erred in acquitting the accused, contending that the cheque was given as collateral security and had consideration, thus falling under Section 138 of the NI Act. Citing the Supreme Court's decision in B. I. Zala Vs. Shanku Concrete (Pvt.) Ltd, the appellant sought to establish the legal basis for the complaint and the notice issued.

On the other hand, the respondent's counsel argued that the complaint was not maintainable as the payee had died before the cheque was dishonored, making the complainant ineligible to file the complaint as a holder in due course. Referring to Section 138(b) of the NI Act and the Karnataka High Court's decision in Koya Moideen Vs. Hariharan, the respondent's counsel supported the Trial Court's decision to acquit the accused.

Upon review, the High Court found that the complainant could not be considered a holder in due course as the cheque was issued in favor of the deceased father. The Court agreed with the Trial Court's reasoning that the complainant's legal position did not align with the requirements of Section 138 of the NI Act. The High Court upheld the Trial Court's decision, emphasizing that no interference was necessary, and dismissed the appeal, confirming the acquittal of the accused.