Karnataka High Court
Mr. Mukkaram Jan vs Bank Of India on 12 March, 2024
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF MARCH, 2024
BEFORE
THE HON'BLE MR. JUSTICE R.NATARAJ
CRIMINAL PETITION NO.4637 OF 2018
c/w
CRIMINAL PETITION NO.5448 OF 2018
IN CRL.P.NO.4637/2018:
BETWEEN:
MR. MUKKARAM JAN
S/O LATE AZAM JAN,
AGED ABOUT 51 YEARS,
R/AT FLAT NO.G-10,
NO.5, CAVALCADE APARTMENTS,
BENSON CROSS ROAD,
BENSON TOWN,
BANGALORE-560 046.
...PETITIONER
(BY SRI. RAVI B NAIK, SENIOR ADVOCATE AND SRI. DHYAN
CHINNAPPA, SENIOR ADVO FOR SRI. CHINTAN CHINNAPPA,
ADVOCATE)
AND:
BANK OF INDIA
A BODY CORPORATE CONSTITUTED UNDER
THE BANKING COMPANIES (ACQUISITION AND
TRANSFER OF UNDERTAKING) ACT, 1970,
AND HAVING ITS HEAD OFFICE AT
"STAR HOUSE", PLOT NO.C-5, "G" BLOCK,
BANDRA-KURLA COMPLEX,
BENDRA (EAST), MUMBAI-400 051,
AND A BRANCH KNOWN AS
2
BANGALORE MID CORPORATE BRANCH,
BOI BUILDING, 1ST FLOOR, NO.11, K.G. ROAD,
BANGALORE-560 009
REPRESENTED BY ITS BRANCH MANAGER
...RESPONDENT
(BY SRI. A. MAHAMMED TAHIR, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO
QUASH THE ENTIRE PROCEEDINGS INITIATED AGAINST THE
PETITIONER IN C.C.NO.54616/2015 REGISTERED UNDER
SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881
PENDING ON THE FILE OF THE 58TH A.C.M.M., BANGALORE
(PRODUCED AS ANNEXURE-J IN THE CRIMINAL PETITION).
IN CRL.P. NO.5448/2018:
BETWEEN:
MR. ASIF KHADER
S/O LATE SYED ABDUL KHADER,
AGED ABOUT 53 YEARS,
R/AT 39-CG1/2,
AGA ABBAS ALI ROAD,
ULSOOR, BANGALORE-560042
...PETITIONER
(BY SRI. R. HEMANTH RAJ, ADVOCATE)
AND:
BANK OF INDIA
A BODY CORPORATE CONSTITUTED UNDER
THE BANKING COMPANIES (ACQUISITION AND
TRANSFER OF UNDERTAKING) ACT, 1970,
AND HAVING ITS HEAD OFFICE AT
"STAR HOUSE", PLOT NO.C-5, "G" BLOCK,
BANDRA-KURLA COMPLEX,
BENDRA (EAST), MUMBAI-400 051,
AND A BRANCH KNOWN AS
BANGALORE MID CORPORATE BRANCH,
BOI BUILDING, 1ST FLOOR, NO.11, K.G. ROAD,
3
BANGALORE-560 009
REPRESENTED BY ITS BRANCH MANAGER
...RESPONDENT
(BY SRI. A. MAHAMMED TAHIR, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO
QUASH THE ENTIRE PROCEEDINGS INITIATED AGAINST THE
PETITIONER IN C.C.NO.54616/2015 REGISTERED UNDER
SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT PENDING ON
THE FILE OF LVIII ADDL.C.M.M., BENGALURU (PRODUCED AS
ANNEXURE-A IN THE CRIMINAL PETITION).
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDER ON 21.12.2023 AND COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE THE
FOLLOWING:-
ORDER
Crl.P.No.4637/2018 is filed by accused No.3 in C.C.No.54616/2015 pending trial before the LVIII Additional Chief Metropolitan Magistrate, Bengaluru for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (henceforth referred to as "N.I. Act").
Crl.P.No.5448/2018 is filed by accused No.2 in C.C.No.54616/2015 pending trial before the LVIII Additional Chief Metropolitan Magistrate, Bengaluru for the 4 offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
2. The respondent initiated steps to prosecute the petitioners for an offence punishable under Section 138 of the N.I. Act for dishonour of three cheques for a sum of Rs.5,00,00,000/- drawn by accused No.1 in its own name. The private complaint lodged by the respondent disclosed that the accused had approached it for financial assistance to meet its working capital requirement and accordingly, the respondent sanctioned various facilities such as, cash credit, corporate loan, short term loan and funded interest term loan. The respondent claimed that due to failure on the part of the accused to clear the outstanding, all the accounts were treated as non-performing assets with effect from 30.09.2009 and a proceeding was initiated in O.A.No.467/2011 before the Debt Recovery Tribunal, Bengaluru, which allowed the application and issued a recovery certificate in DRC No.7364 dated 17.09.2013 and ordered recovery of sum of Rs.277,17,92,568.99 along 5 with future interest. The respondent claimed that pursuant to the recovery certificate, the accused had issued three cheques mentioned above for a sum of Rs.5,00,00,000/-, all drawn in the name of the accused No.1 towards discharge of the outstanding in the account of the accused No.1. However, these cheques were dishonoured due to insufficient funds in the account of the accused which was intimated to the respondent in terms of an endorsement dated 30.05.2015. The respondent caused a statutory notice to the accused which was duly served. Since the accused did not comply with the demand made in the notice, the respondent initiated proceedings under Sections 138 and 141 of the N.I. Act.
3. The Trial Court recorded the pre-summons evidence of the respondent and registered C.C.No.54616/2015 and issued process to the accused.
4. Being aggrieved by the aforesaid, the petitioners are before this Court challenging the 6 proceedings initiated against them and the prosecution launched against them.
5. The learned Senior counsel for accused No.3 submitted that the respondent was neither the holder nor a holder in due course of the three cheques mentioned above. He submitted that there is not even an averment in the private complaint that the respondent was a holder in due course. He invited the attention of the Court to the three cheques and contended that the drawer and the drawee are the same and there is no endorsement made on the cheque endorsing it in favour of respondent. He therefore, contends that an offence under Section 138 of the N.I. Act is not maintainable at the instance of the person who is neither the holder nor the holder in due course. Learned Senior counsel invited the attention of the Court to proviso to Section 138 of the N.I. Act, which reads as follows:-
"Nothing contained in this Section shall apply unless 7
(a) xxxxxx
(b) the payee or the holder in 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."
6. The learned Senior counsel therefore, contended that the cognizance of an offence under Section 138 of the N.I. Act can be taken only at the instance of either the payee or holder in due course of the cheque. He further submitted that the holder of a cheque is largely different from the holder in due course and referred to Section 9 of the N.I. Act which reads as follows:-
"9. "Holder in due course".-- "Holder in due course" means any person who for consideration became the possessor of a promissory note, bill of 8 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."
7. The learned Senior counsel submitted that the Negotiable Instrument in question was not drawn for consideration and the cheque in question was not drawn favouring the bearer but favouring the drawer itself. He therefore, contends that the prosecution initiated against the petitioners at the instance of the respondent is wholly improper and the Trial Court without looking into these fundamental aspects blindly took cognizance of the offence. In support of his contention, learned Senior counsel relied upon the judgment of the Hon'ble Apex Court in Pradeep Kumar & Anr. Vs. Postmaster General & Ors. [Civil Appeal No.8775-8776/2016] where it was held that "holder in due course means the original holder or a transferee in good faith who has acquired possession of the negotiable instrument for 9 consideration, without having sufficient cause to believe that there was any defect in the title of the person from whom he has derived the title. Negotiation in case of transfer should be before the amount mentioned in the negotiable instrument becomes payable". He therefore contended that the cheques in question are not transferred for consideration and therefore the respondent was not a holder in due course. He relied upon the judgment of Gauhati High Court in Jiten Barkakoti vs Subrata Patangia and another [Criminal Revision No.555/2003] where it was held;
"7. xxx Ext.1 is a self-drawn cheque. It was not issue in favour of the complainant. It was also not endorsed in favour of the complainant. Hence, the provisions of Sections 118 and 139 of the Act are not applicable as the complainant is neither a payee nor a holder in due course and the dishonour or such self-drawn cheque does not amount to penal offence under Section 138 of the Negotiable Instruments Act."10
8. He also relied on the judgment of Bombay High Court in CPEC Engineering Ltd., Mumbai and others vs Bombay Mercantile Co-operative Bank Ltd., Mumbai and another [2013 SCC online BOM 1580] where it was held;
"19. xxx if the definition of holder as reproduced above in the earlier paragraphs and mentioned in Section 8 of the Negotiable Instruments Act is considered, then the holder must be a person entitled in his own name to the possession of the said negotiable instrument. However, for the absence of name of respondent No.1 Bank in the cheque and in the absence of any mandate in favour of respondent No.1 Bank to credit the amount of said cheque, for clearing the outstandings in the loan account of the petitioner company, the presumption envisaged under section 118 (9) of the Negotiable Instruments Act cannot be taken in favour of the respondent bank.
20. Considering the rival submissions and considering the definitions of "payee", "holder" and "holder in due course" and considering the provisions of sections 138 and 142 of Negotiable 11 Instruments Act, it must be said that the respondent No.1 was not holder in due course in the strict sense of the meaning so far as the dishonoured cheque is concerned."
9. He next contended that the accused Nos.2 and 3 are the directors of the accused No.1. He submits that not all directors can be prosecuted until there is a clear statement that a particular director was directly involved or was responsible for the day to day business of a company. He submits that under Section 141 of the N.I. Act,mandates that every person who is responsible for the conduct of the business of a company could be prosecuted. He submitted that in the present case, except claiming that accused Nos.2 and 3 were directors and were incharge of and responsible for the day to day affairs of the company. He submits that an omnibus statement would not satisfy the requirement of Section 142 of the N.I. Act and specific statement has to be averred. He referred to a judgment of a co-ordinate bench of this Court in Kittur Rani Chennamma Urban Co-Op. Credit Society Ltd., vs Shri Mallikarjun Gangadhar Pasalkar [Crl. R.P. No 12 2321/2010] where this Court noticed that the cheque in dispute was drawn in the name of the father of the accused. This Court held that the complainant who possessed the cheque was not the payee. However, having regard to the circumstances alleged in the complaint, the complainant did not answer the description of a holder in due course. It was also held that to be a holder in due course, he must get the possession of the instrument, if payable to a bearer or he must be payee or endorsee if payable to or to the order of the payee. It was held that the complainant had neither averred in the complaint nor he had produced any material to show that the cheque in question was delivered to him by the drawer or that it was endorsed to him. Therefore, it was held that the complainant was not a holder in due course and hence an action under Section 138 of the N.I. Act could not be initiated against the accused. He relied upon the judgment of the Hon'ble Supreme Court in the case of Central Bank of India Vs. Asian Global Ltd. & Ors. [AIR 2010 SC 2835] where it was held that, "the Directors of a company 13 are not vicariously liable merely because of the position they hold in the Company". He contended that there should be a specific allegation in the complaint with regard to part played by them in the transaction. He also claimed that there should be clear and unambiguous statement of the Directors who were incharge of and responsible for the business of the company.
10. Per contra, the learned counsel for the respondent submitted that the cheques in question were drawn by the accused to be deposited in the loan account of the accused No.1 with the respondent. Therefore, it was natural that the drawer and the drawee would be the same. He contends that the respondent was the possessor of the cheques and hence it is a holder in due course. In support of its contention, the learned counsel relied upon the judgment of the co-ordinate bench of this Court in Nabiraj Vs. State Bank of India (Crl. P. No.6816/2015) where it was held that, 14 "11. In the instant case, the cheque does not contain any indorsement in favour of the complainant - Bank. Nonetheless there being clear averments in the complaint that the cheque in question was received by the complainant for valuable consideration namely, towards discharge of the debt due by AZTEC Digitals Private Limited of which the petitioner was Director, in my view, complainant falls within the description of "holder in due course" as defined under section 9 of N.I. Act.
12. Indorsement is not the only mode by which a cheque could be negotiated. The term "negotiation" is defined under section 14 of the N.I. Act as under:
"14. Negotiation.- When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute the person the holder thereof, the instrument is said to be negotiated."
In view of this provision, even delivery of the instrument for consideration can be valid negotiation."
11. He contended that a Special Leave Petition filed against the judgment in Nabiraj in SLP Crl. No.11591/2019 was dismissed on 07.01.2020. He therefore contends that in the present case too the 15 cheques in question were handed over to the respondent bank to be deposited in the loan account of the accused. Hence, delivery of the instrument amount to a valid negotiation.
12. He next relied upon the judgment of High Court of Chhattisgarh in Simeya Hariramani vs Bank of Baroda [Criminal Miscellaneous Petition No.956/2017], where the Court dealing with facts similar to the one on hand held,
10. It is apparent from the definition of "holder in due course" that for being a 'holder in due course' of a bill or a cheque, it was not necessary that there should be an endorsement on the bill or cheque. Holder in due course has been defined as any person, who for consideration, becomes the possessor of the promissory note or cheque. In the instant case, according to the complainant the petitioners/accused had obtained the loan from the complainant-Bank and handed over the cheques in repayment of loan and therefore the cheques were held by the Bank in consideration of loan to liquidate the same. A person whose banking account is overdrawn or his 16 loan account is over due, if negotiates with his banker a cheque to reduce the overdraft or to repay the loan the banker becomes a holder for value of the cheque. The pre- existing debt of the loan or overdraft is a sufficient consideration for the negotiation of a cheque to the banker. If a person hand-overs cheque to the bank with the clear understanding to the bank that cheque is towards the debt payable by the Company or Firm though the cheque remains in the name of the Company or Firm but in such case the bank would become holder of the cheque in due course. The credit given by the Bank to its customer can be discharged by cheque or payment in cash and if the payment for liquidation of the loan is made by a cheque then the Bank would become the 'holder in due course' irrespective of the fact that the cheque is not endorsed in favour of the bank. The existing debt is always considered as valid consideration, therefore, in the facts and circumstances of the present case though the drawer and drawee were the same, the Bank was holder in due course.
13. He then referred to the judgment of the Hon'ble Apex Court in Punjab & Sind Bank vs Vinkar Sahakari Bank Ltd. and others [(2001) 7 SCC 721] where the Court was considering a case of dishonour of a 17 pay order by the drawer bank and prosecution was initiated by a ban in whose favour it was assigned. The Court held;
"21. Section 142 of the Act envisages a complaint to be made in writing either by the payee or the holder in due course of the cheque, as the case may be. Section 8 of the Act defines "holder" as any person entitled in his own name to the possession of the cheque and to receive or recover the amount due thereon from the parties thereto. We have no doubt that the complainant Bank was well within its right to possess the cheque and to receive or recover the amount covered by the instrument. "Holder in due course"
means a person who for consideration became the possessor of a cheque if payable to bearer before the amount became payable (vide Section 9).
22. In this context reference has to be made to Section 118(g) of the Act which contains a mandate that until the contrary is proved the holder of a negotiable instrument shall be presumed to be a holder in due course. Thus there is no escape for the court from drawing such presumption.
23. It is undisputed that the complainant Company is the holder of the instrument on its own 18 right. As such it could be a holder in due course also until the party concerned adduces evidence to rebut the presumption. It is of course open to the respondents to rebut the presumption in the trial but till then the High Court could not say that the complainant is not a holder in due course at all."
14. He referred to a judgment of a Co-ordinate Bench of this Court in B. Sarvothama vs. S.M.Haneef [2013 (4) KCCR 2900] where a self drawn cheque was dishonoured and prosecution was launched by the holder of the dishonoured cheque. This Court held;
"Therefore, in the present case on hand, it was established that the complainant had received a bearer cheque for consideration and in discharge of a legal liability and was a holder in due course, of the same. The dishonour of the cheque was for the reason that the account of the petitioner did not carry sufficient funds- the bank had also issued a memo in this regard to the complainant, which is produced and marked as a document at the trial. The burden was heavy on the petitioner to establish that the cheque was not issued in discharge of a legal liability. The petitioner has failed to do so. The plea that the cheque being a 19 self cheque would not attract Section 138 of the NI Act, is not tenable."
15. He then referred to the judgment of the Hon'ble Apex Court in A.R.Radha Krishna vs. Dasari Deepthi and others [(2019) 15 SCC 550] where the Court summarised the factors to be examined before exercising powers under Section 482 of Cr.P.C. to quash proceedings against directors of a company under Section 138 of NI Act;
" 7. xxx In a case pertaining to an offence under Section 138 and Section 141 of the Act, the law requires that the complaint must contain a specific averment that the Director was in charge of, and responsible for, the conduct of the company's business at the time when the offence was committed. The High Court, in deciding a quashing petition under Section 482 CrPC must consider whether the averment made in the complaint is sufficient or if some unimpeachable evidence has been brought on record which leads to the conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time.20
While the role of a Director in a company is ultimately a question of fact, and no fixed formula can be fixed for the same, the High Court must exercise its power under Section 482 CrPC when it is convinced, from the material on record, that allowing the proceedings to continue would be an abuse of process of the Court."
16. He then relied upon the judgment of the Hon'ble Apex Court in Gunmala Sales Private Limited vs. Anu Mehta and others [(2015) 1 SCC 103] where the Hon'ble Apex Court held as follows:
34.1 Once in a complaint filed under Section 138 read with Section 141 of the NI Act the basic averment is made that the Director was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, the Magistrate can issue process against such Director;
34.2 If a petition is filed under Section 482 of the Code for quashing of such a complaint by the Director, the High Court may, in the facts of a particular case, on an overall reading of the complaint, refuse to quash the complaint because the complaint contains the basic averment which is sufficient to make out a case against the Director.21
34.3 In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particulars about role of the Director in the complaint. It may do so having come across some unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of the process of the court.
Despite the presence of basic averment, it may come to a conclusion that no case is made out against the Director. Take for instance a case of a Director suffering from a terminal illness who was bedridden at the relevant time or a Director who had resigned long before issuance of cheques. In such cases, if the High Court is convinced that prosecuting such a Director is merely an arm- twisting tactics, the High Court may quash the proceedings. It bears repetition to state that to establish such case unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have to be brought to the notice of the High Court. Such cases may be few and far between but the possibility of such a case being there cannot be ruled out. In the absence of such 22 evidence or circumstances, complaint cannot be quashed;
34.4 No restriction can be placed on the High Court's powers under Section 482 of the Code. The High Court always uses and must use this power sparingly and with great circumspection to prevent inter alia the abuse of the process of the Court. There are no fixed formulae to be followed by the High Court in this regard and the exercise of this power depends upon the facts and circumstances of each case. The High Court at that stage does not conduct a mini trial or roving inquiry, but, nothing prevents it from taking unimpeachable evidence or totally acceptable circumstances into account which may lead it to conclude that no trial is necessary qua a particular Director.
17. He also relied on the judgment of the Hon'ble Apex Court in Standard Chartered Bank Vs State of Maharashtra and others [(2016) 6 SCC 62] where it was held;
"32. The aforesaid averments, as we find, clearly meet the requisite test. It is apt to mention here that there are seven accused persons. Accused No.1 is the Company, accused Nos.2 and 3 are the Chairman and Managing Director 23 respectively and accused Nos.6 and 7 were signatory to the cheques. As far as the accused Nos.4 and 5 were concerned, they were whole-time Directors and the assertion is that they were in charge of day-to-day business of the Company and all of them had with active connivance, mischievously and intentionally issued the cheques in question."
18. I have considered the submissions made by the learned Senior counsel for the petitioners as well as the learned counsel for the respondent.
19. The two questions that arise for consideration in this petition are:
(i) Whether the respondent who was neither the payee nor holder in due course of the three cheques, could prosecute the accused for the offence punishable under Section 138 of N.I. Act?
(ii) Whether the complaint contained the statements required under Section 141 of N.I. Act?24
20. Before the aforesaid questions are considered, it is appropriate to record the facts that are not in dispute.
A cheque is a bill of exchange drawn on a specified banker and is payable on demand. The one who draws is the "drawer" and the one who is directed to pay the amount is the "drawee" and the person to whom it is payable is called the "payee". A person who is entitled in his own name to the possession of the bill of exchange to receive or recover the amount due from the parties thereto is the "holder". A person who for consideration possesses such a negotiable instrument payable to a payee or a bearer, before it is paid is called a "holder in due course".
21. A perusal of Section 138 of the N.I. Act shows that when a cheque is drawn by a person for payment of any amount to another person towards discharge in whole or in part of debt or any other liability, is returned unpaid due to insufficient funds in the account or that it exceeds the amount arranged to be paid, then such person is deemed to have committed an offence. However, the 25 aforesaid would not be attracted unless a "payee" or "the holder in due course" makes a demand for the payment of the amount covered under the cheque by giving a notice in writing and if the drawer fails to make the payment to the payee or the holder in due course within 15 days from the date of receipt of the notice. Under Section 139 of the N.I. Act, a statutory presumption is drawn in favour of a holder of a cheque that he had received it for the discharge in whole or in part of any debt or other liability. Therefore, ordinarily, it is a "payee" or a "holder in due course", who is entitled to launch a prosecution for an offence punishable under Section 138 of the N.I. Act. In the present case, the question is whether the respondent a "payee" or "a holder in due course".
22. If the cheques in question are perused, the "drawer" and the "payee" is the accused No.1. They are crossed generally, which is the ordinary course were payable only to a banker. No doubt the words 'bearer' is 26 not scored off. A holder of a cheque is defined under Section 8 of the N.I. Act which reads as follows:
"8. "Holder".- The "holder" of a promissory note, bill of exchange or 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."
23. A holder in due course is defined under Section 9 of the N.I. Act and reads as follows:
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.27
24. When a cheque is transferred to another person so as to constitute that person to be holder thereof the instrument is said to be negotiated.
25. Though the respondent was not the "payee" or the "holder in due course" in the grammatic sense, the circumstance that makes the difference is the fact that these cheques were purportedly drawn by the accused and the custody of those cheques were handed over to the respondent to be credited into the loan account of the accused at the respondent bank. These cheques were indisputably dishonoured due to insufficient funds. In the statutory notice issued under Section 138(b) of the N.I. Act, it was specifically stated that the accused had delivered the cheques to the respondent towards part discharge of the liability of the accused. It was also mentioned that a recovery certificate was issued by the Debt Recovery Tribunal in DRC No.7364 dated 17.09.2013 to recover a sum of Rs.277,17,92,568.99 along with interest. It was also stated that the accused drew and 28 issued the cheques in question to the respondent towards the part payment of their liability. This was not disputed in the reply to this notice.
26. Therefore, as held by a Co-Ordinate Bench of this Court in Nabiraj (supra), when the cheque came into the possession of the holder for consideration towards discharge of a debt either in whole or in part, then the requirement of Section 9 of the N.I. Act is deemed to be satisfied and the respondent is a "holder in due course", the consideration being the discharge of debt in the account of the accused No.1. Hence, question No.(i) is answered in the affirmative and it is held that the respondent was a holder in due course.
27. The private complaint filed by the respondent disclose that the accused Nos.2 and 3 were the persons running the day to day affairs of the accused No.1 and were responsible for all matters pertaining to the affairs of the accused No.1 as both of them stood guarantee for the credit facilities granted to the accused No.1. The question 29 whether the petitioners were not responsible or were not carrying on the business of accused No.1, are issues of fact which the petitioners are bound to establish before the Court and not in a petition under Section 482 of Cr.P.C. In so far as compliance of Section 141 of the N.I. Act, is concerned, a perusal of the complaint shows that sufficient averments are made to justify the prosecution of petitioners. Hence, the question No.(ii) is answered against the petitioners and it is held that there was sufficient allegations in the private complaint justifying the prosecution of petitioners.
28. In that view of the matter, these petitions lack merit and are dismissed.
Sd/-
JUDGE bvv