Judgment:
ORDER
V.S. Aggarwal, J.
1. This is a petition filed by Mahesh Goyal (hereinafter described as the petitioner) for quashing the complaint filed by respondent S.K. Sharma and the summoning order passed by the learned Judicial Magistrate, Dhuri.
2. The relevant facts are that the respondent filed a complaint against the petitioner Under Section 138 of the Negotiable Instruments Act, contending, that the petitioner had borrowed Rs. 6,2007- from the respondent. He had promised to return the same on demand. In discharge of the debt, the petitioner issued a cheque dated 1-6-1994 drawn in Indian Overseas Bank. The respondent presented the cheque to Punjab National Bank, but in turn, sent it to the Indian Overseas Bank, Ambala Cantt. the cheque was returned with the remarks not arranged for. Since the cheque was dishonoured, the respondent issued notice to the petitioner. The money was not paid within the stipulated time. Hence the complaint was filed. Learned Judicial Magistrate had summoned the petitioner as an accused vide his order dated 10-3-1995.
3. The petitioner contends that in the facts of the case, the provisions of Section 138 of the Negotiable Instruments Act are not attracted. It was self-drawn cheque. In such like cheques which were drawn in own name, Section 138 of the Negotiable Instruments Act is not attracted and, therefore, the complaint and the order summoning the petitioner should be quashed.
4. Needless to say that in the reply filed the said petition has been contested. The respondent's pleaded case was that the petitioner on behalf of his wife is running chit fund at Ambala in the name and style of Anshul Chits. The petitioner had issued different cheques to the respondent. All of them had been dishonoured. Two Complaints were filed at Dhuri. It was denied that in case when cheque is drawn to self, Section 138 of the Negotiable Instruments Act is not attracted.
5. The short argument advanced at the time of arguments and on behalf of the petitioner was that the cheque was drawn to self and in such like case when it was not addressed to any third person to whom the payment was due, Section 138 is not to be attracted.
6. To appreciate the said contention, reference can well be made to the provisions of Section 138 of the Negotiable Instruments Act which has been added by virtue of amending Act w.e.f. 5-9-1988. it reads as under : --
138. Dishonour of cheque for insufficiecy etc., of funds in the account - Where any cheque drawn by a person on an account maintained by -him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing, to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained in this section shall apply unless -
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(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 fifteen 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.
Explanation -- Forme purposes of this section, 'debt or other liability'meansalegally enforceable debt or other liability.
7. A glance to the above provisions leaves no doubt that it is not an ingredient of Section 138 of the Negotiable Instruments Act that the cheque should be drawn in the name of another person. All that is required is that the cheque should be drawn by the person from the account maintained by him. It can be drawn in his own name as self or in the name of third person. It should be payment of the debt. There are certain conditions before the strict provisions of Section 138 of the Negotiable Instruments Act would be attracted and the same have to be satisfied. It is not relevant for the purpose of present petition, but the payee or holder of the cheque has to be in due course of the cheque. He has to make demand of the payment of the amount. Section 9 reads as under: -- .
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. (See Under Section 118(a) also).
8. The expression 'holder in due course' is clear and unambiguous. The words are plain and meaning clear. A holder in due course is a person who is possessor of an instrument even then it is payable to bearer. He must be in possession of it. If the bill is payable to holder then he has to be a payee or indorsee of the same.
9. In the present case in hand perusal of the cheque indicates that it was addressed as payable to 'self and that the word bearer has not been deleted. It is not even scored off. There were certain transactions alleged and the money was claimed to be due. The respondent was in possession of the same and presented it before the bank, but it was dishonoured. He was obviously holder in due course. When other conditions were satisfied, there was no question of holding that merely because the cheque was addressed to self, section 138 in the facts would not be attracted. Once the cheque had been given for valid consideration, the respondent must be taken to be holder in due course. Reference in this connection may be made with advantage to the decision in the case of Praveen Metal Agencies v. M. Balasubramanyam (1995) 84 Com Cas 782. The facts were a little different but the question did arise as to who would be holder in due course. Once there were dealings between the parties and there was valid consideration and the plaintiffs were in possession of the cheques, it was held that they were holders in due course. The Karnataka High Court held as under: --
On the first question even the trial Court has held in favour of the plaintiffs. The relevant accounts maintained by the plaintiffs in due course of their business were marked in evidence and spoken to by PW 1. It is clear from exhibit P-6 that there were prior dealings between the plaintiffs and the second defendant. Amounts were being adjusted in the accounts either by receipt of cash or cheques. When Exhibits P-4 and P-5 were endorsed in favour of the plaintiffs by the second defendant, in the accounts of the plaintiffs some amounts were due to them by the second defendant. The cheques endorsed in favour of the plaintiffs were accordingly adjusted towards this amount. However, subsequently the cheques were not honoured by the bank. The fact remains that there were dealings between the plaintiffs and the second defendant and the outstandings due to the plaintiff by the second defendant were adjusted by virtue of the cheques being endorsed in favour of the plaintiffs. Therefore, it cannot be denied that there was a valid consideration for the endorsement; in other words, the plaintiffs became the holders in due course of the cheques because they came to possess the cheques for valid consideration.
10. The position in the present case as already pointed above is identical. Keeping in view that the respondent was holder in due course for valid consideration as per allegation and the cheque had been dishonoured, the very basis of the argument so much thought of by the petitioner falls like a house of cards.
11. For these reasons, this petition being without merit, fails and is dismissed.