Madras High Court
Palaniappa Mills Rep. By Its vs A.Vaithiyalingam on 13 December, 2010
Author: K.B.K.Vasuki
Bench: K.B.K.Vasuki
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 13.12.2010 Coram THE HONOURABLE MS. JUSTICE K.B.K.VASUKI Crl.R.C.Nos.1245 and 1258 of 2007 and M.P.Nos.1 and 1 of 2007 1.Palaniappa Mills rep. by its Partner, P.Natarajan 2.P.Natarajan .. Petitioners in both Crl.R.Cs Vs. A.Vaithiyalingam .. Respondent in both Crl.R.Cs Prayer:- Criminal Revisions filed under Section 397 r/w 401 of Cr.P.C. against the judgment dated 10.5.2005 made in C.A.Nos.163 and 164 of 2004 respectively on the file of the Additional District Court/Fast Track Court No.I, Erode, confirming the judgment dated 24.8.2004 made in C.C.Nos.6 and 354 of 2000 respectively on the file of the learned Judicial Magistrate No.III, Erode. For Petitioners : Mr.N.Manokaran in both cases For Respondent : Mr.B.Singaravelu in both cases COMMON ORDER
The accused 1 and 2 are the revision petitioners herein. The Criminal revisions are filed against the judgment of conviction and sentence imposed on the petitioners dated 24.8.2004 made in C.C.No.6 and 354 of 2000 on the file of the Judicial Magistrate No.III, Erode as confirmed in the judgment dated 10.5.2005 made in C.A.Nos.163 and 164 of 2004 on the file of Additional District Court/Fast Track Court No.I, Erode, for the offence under Section 138 of Negotiable Instruments Act.
2.As the complainant and the accused in both the complaints are one and the same and as the controversy in issue involved in both are also identical, both the criminal revisions are disposed of by common order.
3.The respondent herein has filed two private complaints against the accused as holder in due course of the cheques in question which are admittedly issued by the petitioners herein in favour of one M.R.Murugesan though was arrayed as sixth accused in C.C.No.6 of 2000 and fifth accused in C.C.No.354 of 2000, no cognizance was taken against him as he had according to the respondent/complainant discounted the above cheques after receiving valid consideration.
4.The contesting accused have among other grounds seriously objected to the maintainability of the complaints on the ground that there is no endorsement on the back side of the cheques in question by M.R.Murugesan to treat the complainant as holder in due course and mere signature of M.R.Murugesan will not amount to due endorsement. Both the courts below have while disposing of the cases on merits by raising legal presumption and by construing the signature as due endorsement found the accused guilty of the offence under Section 138 of Negotiable Instruments Act.
5.The main point that arises for consideration herein is whether mere signature of the holder on the back side of the cheques in question amounts to due endorsement evidencing the transaction between the original lender M.R.Murugesan and the complainant and vests the complainant with the right to maintain any proceeding as holder in due course.
6.The learned counsel for the petitioners has cited the following authorities viz. (i)2005 (1) DCR 323 in Ashok Kumar v K.Gunasekaran (ii) 2006 (2) TNLR 693 (Mad) in Mukesh Chandra Guptha v. Anu Kumar Jain, wherein the issue involved is directly dealt with. In the cases above cited, the complaint is filed by the person claiming himself as holder in due course whereas endorsement found in the cheque was blank endorsement and the original lender was not examined as witness on the side of complainant and under such circumstances, our High Court is of the view that "holder in due course means any person who for consideration became the possessor of a promissory note" and when the consideration for passing of the cheque is not satisfactorily proved, the presumption that the other person is holder of cheque in due course cannot be drawn in favour of the complainant. The same view is also expressed by Andhrapradesh High Court in the judgment reported in 2005(1) Bankmann 452 in M.Ethirajulu v. Rangam Adinarayana and others. The Andhrapradesh High Court expressed similar view on the basis of law laid down by our Apex Court in the judgment reported in (1991) 1 SC 113 in U Ponnappa Moothan Sons v. Catholic Syrian Bank Ltd that "the definition makes it clear that to be a 'holder' in due course' a person must be a holder for consideration and the instrument must have been transferred to him before it becomes overdue and he must be a transferee in good faith and another important condition is that the transferee namely the person who for consideration became the possessor of the cheque should not have any reason to believe that there was any defect in the title of transferer".
7.In the present case also, there is no endorsement found in the document and the passing of consideration is also not duly proved by the complainant by summoning the said Murugesan whose signature is found on the back side. If that is so, the ratio laid down by the Hon'ble Supreme court as followed by the Andhrapradesh High Court is clearly applicable to the facts of the present case and by applying the same ratio, this court is inclined to hold that the complainant failed to prove that he is the holder in due course and hence, has no locus standi to maintain the complaints. On this score alone, the judgments of the courts below are to be necessarily set aside.
8.In the result, both the criminal revisions are allowed by setting aside the judgments of the courts below. Both the complaints filed by the respondent are rejected as not maintainable. The fine paid by the accused is directed to be refunded to them. Consequently, connected Miscellaneous Petitions are closed.
rk To
1.The Additional District Court/Fast Track Court No.I, Erode,
2.The Judicial Magistrate No.III, Erode