Andhra HC (Pre-Telangana)
H.L. Agarwal vs Rakesh Agarwal And Anr. on 29 August, 1996
Equivalent citations: 1997(1)ALD(CRI)907, 1997(1)ALT(CRI)678, [1997]89COMPCAS531(AP)
Author: Ramesh Madhav Bapat
Bench: R.M. Bapat
JUDGMENT Ramesh Madhav Bapat, J.
1. This is an appeal filed by the original complainant, who had instituted the prosecution against the accused under section 138 of the Negotiable Instruments Act, 1881. It was averred by the complainant in his complaint that he is a businessman and he has been knowing the accused since a long time. The accused was in need of money for his own purpose. Therefore, he had approached the complainant with a request to lend him a sum of Rs. 10,000. The complainant agreed to pay the said amount and in fact it was paid to the accused and the accused is alleged to have issued a cheque for Rs. 10,000 on September 20, 1990, in favour of the complainant.
2. It is the further case of the complainant that the said cheque was negotiated by him by making endorsement on the cheque to a third party named Rajesh and Brothers. When the said cheque was presented by Rajesh and Brothers on the due date, it was dishonoured. According to the submissions made by learned counsel for the appellant-accused, Rajesh and Brothers were acting as the agents of the complainant. In fact, the said cheque was not negotiated by the complainant in favour of Rajesh and Brothers for consideration but they were merely acting as agents. When the said cheque was dishonoured, Rajesh and Brothers returned the cheque to the complainant, and, therefore, the complainant issued 15 days' notice to the accused and filed the prosecution.
3. The learned Magistrate on evidence acquitted the accused. Against the order of acquittal, the present appeal has been filed by the complainant.
4. Learned counsel appearing for the appellant-complainant submitted at the Bar that the order of acquittal recorded by the learned Magistrate in C.C. No. 162 of 1991 is bad in law. Learned counsel further submitted that the cheque was not endorsed in favour of Rajesh and Brothers for consideration. They were merely acting as the agents of the complainant. When Rajesh and Brothers could not get the amount due under the cheque, the said cheque was returned to the complainant, and thereafter, the complainant issued a notice to the accused and the prosecution has been filed.
5. While rebutting the aforesaid arguments, learned counsel for respondent No. 1 herein submitted that there is no evidence on record to show that as a matter of fact Rajesh and Brothers were acting as the agents of the complainant. It was also submitted by learned counsel for respondent No. 1 that once the cheque is negotiated by the complainant in favour of Rajesh and Brothers and if such cheque is dishonoured, it is for Rajesh and Brothers to file the complaint against the accused under section 138 of the Negotiable Instruments Act. The complaint is not filed by the proper person, and, therefore, the learned Magistrate has rightly dismissed the complaint.
6. Learned counsel for the first respondent drew my attention to clause (b) of the proviso to section 138 of the Negotiable Instruments Act, 1881, which reads as follows :
"(b) the payee or the holder in the due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid."
7. With this legal provision, it was contended by learned counsel for the first respondent that Rajesh and Brothers were holders in due course. It is for Rajesh and Brothers to give notice to the accused and to file the prosecution against the accused person after completing the formalities, whereas in the present case the drawee of the cheque, i.e., the complainant, has filed the prosecution and such prosecution must be held by a wrong person.
8. Learned counsel for the first respondent further submitted that section 138 of the Negotiable Instruments Act, 1881, has been introduced in the Negotiable Instruments Act by Act 66 of 1988, which was not there earlier. It being a technical offence, all the technical formalities as contemplated under section 138 of the Negotiable Instruments Act, 1881, must be complied with, failing which the accused is entitled to an acquittal. This court is in agreement with the submissions made by learned counsel for respondent No. 1. In the present case, the prosecution is not filed by Rajesh and Brothers, who were holders in due course, but the prosecution has been filed by the payee of the cheque, who had lost every right over the cheque as the cheque was endorsed by the complainant in favour of Rajesh and Brothers, and therefore, the complainant lost the right of filing the prosecution against the accused-first respondent herein.
9. Considering the above position of facts and law, this court holds that no error is committed by the Fourth Metropolitan Magistrate, Hyderabad, in acquitting the accused.
10. Hence, this criminal appeal is dismissed.