Judgment:
D. Murugesan, J.
1. The petitioners are the accused in T. R. C. No. 1456 of 1999 on the file of the learned Judicial Magistrate, Coonoor. The first respondent is the complainant. According to the complaint preferred by the first respondent under Section 138 of the Negotiable Instruments Act, 1881, against the second respondent as well as against the petitioners before the learned Judicial Magistrate, Coonoor, the second respondent M/s. Ranjith Commercial Company had business dealings with the petitioners in respect of which the petitioners issued a cheque No. 269274 dated October 26, 1998, in favour of the second respondent for Rs. 10 lakhs drawn on Global Trust Bank Limited, Coimbatore. The first respondent purchased the said cheque from the second respondent for consideration. Thereafter, the first respondent presented the cheque for collection on March 20, 1999, in the capacity of the holder in due course. But the said cheque was returned uncleared on the same date with the endorsement 'exceeds arrangements'. Therefore, the first respondent has preferred the complaint against the petitioners. Challenging the above complaint, the petitioners who were arrayed as the second and third accused have preferred the above petition seeking to quash the complaint.
2. Mr. Srinath Sridevan, learned counsel appearing for the petitioners submitted that the cheque was drawn by the second accused the petitioner herein in favour of M/s. Ranjith Commercial Company, namely, the second respondent and the first accused. It is not in dispute that the amount is maintained by the petitioners herein in Global Trust Bank Limited, Coimbatore. It is also not disputed that the drawer of the cheque is the petitioners and the payee of the cheque is the second respondent. The first respondent, namely, the complainant is neither the payee nor indorsee of the cheque. It is also admitted that the cheque is crossed and also bears the words 'accountpayee'. On the admitted facts the payee of the cheque, namely, the second respondent cannot sell the cheque to the first respondent and the first respondent on such purchase of the cheque cannot be considered as a 'holder in due course'. Even though in the petition, the petitioners have raised number of grounds, learned counsel restricted the arguments only to the question as to whether the complainant, namely, the first respondent in this petition can be considered as a 'holder in due course' as defined under Section 9 of the Negotiable Instruments Act. Learned counsel would submit that Section 9 of the Negotiable Instruments Act defines 'holder in due course' as 'person who for consideration became the possessor of the cheque, if payable to bearer' and 'payee or indorsee thereof, if payable to order'. Learned counsel submitted that the Vijaya Bank is not an indorsee of the cheque and that it became only the possessor of the cheque for consideration. Learned counsel would further submit that the Vijaya Bank can only be the 'holder in due course' if the cheque is payable to bearer. When the cheque is crossed with an endorsement 'account payee only', the said cheque cannot be considered as a cheque payable to the bearer also. Learned counsel would further submit that under Section 13 of the Negotiable Instruments Act, 'a cheque is payable to order if it is payable to a particular person and a cheque is payable to bearer where it is expressed to be payable, or if the endorsement is left blank'. Learned counsel submitted that the instant cheque bears the name of the particular person namely M/s. Ranjith Commercial Company and is also crossed and it also has endorsement 'account payee only'. Further, learned counsel submitted that as per Section 126 of the Act 'where a cheque is crossed generally, the banker on whom it is drawn shall not pay it otherwise than to a banker'. Learned counsel, therefore, submitted that once a cheque is crossed and once the words 'account payee only' are added, the printed form 'or bearer' becomes otiose, by the operation of the statute. Therefore, learned counsel would submit that the instant cheque cannot be purchased by the complainant and by virtue of such purchase from the second respondent herein, the complainant, namely, the first respondent cannot be considered as a 'holder in due course' as defined under Section 9 of the Negotiable Instruments Act. In this context, learned counsel would rely upon a judgment of this court rendered in Crl. O. P. No. 16879 of 1997 dated October 13, 1998, wherein this court has held that in the case of account payee cheques, the mere transferee thereof, is not entitled to prosecute the complaint under Section 138 of the Negotiable Instruments Act. Learned counsel would also rely upon one more judgment of this court in . . . [1998] 4 Cri 554 to contend that a bearer cheque is only another name for what is popularly known as a 'cash cheque', i.e., a cheque which can be encashed across the counter. Therefore, learned counsel submitted that the complaint filed by the first respondent is not maintainable by virtue of theprovisions of Section 142 of the Negotiable Instruments Act which specifically empowers only a payee or the holder in due course of the cheque can make a complaint under Section 138 of the Negotiable Instruments Act.
3. Mr. S. Soundararajan, learned counsel appearing for the first respondent/ complainant would oppose the petition firstly on the ground that when there is a disputed question of facts involved in the petition, this court will not ordinarily go into those disputed questions and come to a conclusion for the purpose of deciding the petition. It is the consistent view of this court as well as the apex court that a complaint cannot be quashed when disputed questions are involved in the petition. Learned counsel would submit that even though the petitioners claim that the cheque was issued in the name of the second respondent and also has an endorsement 'account payee only', the cheque also bears the endorsement of 'bearer'. When the cheque is issued by the petitioners in favour of the second respondent, which contains the endorsement of 'bearer' also, the second respondent is entitled to sell the cheque to the first respondent and in the event of such purchase, the second respondent becomes the 'holder in due course'. Learned counsel submitted that whether the cheque in question is a bearer cheque or an order cheque, whether the cheque in question can be considered as bearer or order in view of the crossing 'account payee' and what was the arrangement between the parties as to whether the cheque was given by way of accommodation not intended to be negotiated with the first respondent are all matters to be decided on the basis of evidence to be let in by both the parties before the learned magistrate. Learned counsel submitted that these disputed questions cannot be agitated before this court in a petition challenging the complaint and seeking for quashing of such complaint. Learned counsel in this context brought to my notice a judgment of the apex court reported in Smt. Chand Dhawan v. Jawahar Lal, : wherein the apex court has held that 'when the allegations in the complaint prima facie constitute the offence ... the High Court would not be justified in quashing the complaint'. Further, learned counsel submitted that the Gujarat High Court in a judgment in Dada Silk Mills v. Indian Overseas Bank [1995] 82 Comp Cas 35 ; [1995] BJ 428 has held that a note of caution is always sounded to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. In the very same judgment it has been also held that (page 65): 'once a legal and valid complaint is filed containing all the necessary allegations so as to prima facie constitute an offence, the court in its inherent or extraordinary power is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint'. In fact, learned counsel brought to my notice the judgment of the apex court in R. P. Kapur v. State of Punjab, : Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi, : Municipal Corporation of Delhi v. Ram Kishan Rohtagi, : and State of Haryana v. Bhajanlal, : All the above Supreme Court judgments have been taken note of by the Gujarat High Court in the judgment referred to supra in Dada Silk Mills v. Indian Overseas Bank [1995] 82 Comp Cas 35 ; [1995] BJ 428. Learned counsel would submit that in view of the above judgments it is not for the High Court or even for the Supreme Court to substitute its own discretion for that of the magistrate or to examine the case on the merits with a view to find out whether or not the allegations in the complaint if proved would ultimately and in the conviction of the accused. Therefore, learned counsel submitted that the question that has been raised by the petitioners can be very well agitated before the learned magistrate by letting in evidence and the petitioners cannot sustain this petition for quashing the complaint on disputed questions.
4. As per the contention of learned counsel for the petitioners that even the word 'bearer' in the cheque has not been scored off, by virtue of the specific endorsement 'account payee only' and also the cheque was drawn in the name of the second respondent, which should be presumed that it cannot be negotiated further by the second respondent more particularly to the first respondent. In the absence of such a right on the second respondent, the first respondent namely the complainant cannot claim himself as a 'holder in due course', because he has purchased the cheque from the second respondent. Per contra, learned counsel would contend that in the absence of scoring off of the word 'bearer' in the cheque would presume that the drawee of the cheque is entitled to encash the same and the complainant on the strength of the purchase of the said cheque can be considered as a 'holder in due course'. It is the specific stand of the complainant that the circumstances in which the cheque was issued by the petitioners and the understanding between the petitioners and the second respondent while such cheque was issued is also relevant especially, when the petitioners have not scored off the word 'bearer' in the cheque. These are all the matters which could be decided only after considering the evidence of both the parties. As submitted by learned counsel for the first respondent when there are disputed questions of fact, this court cannot embark upon the same and to decide on the merits. The apex court in fact in the judgment in Smt. Chand Dhawan v. Jawahar Lal, : while considering the conviction and sentence has held that even after the magistrate has exercised his discretion, it is not for the High Court or even for the Supreme Court to substitute its own discretion for that of the magistrate or to examine the case on the merits with a view to find out whether or not the allegations in the complaint if proved would ultimately end in the conviction of the accused. While that be the case, this court should be more cautious when the petition to quash the complaint is being considered. In my considered view, when there are disputed questions of factthis court cannot embark upon those disputed questions and to give a finding one way or the other. When such discretion cannot be exercised by this court, I cannot go into the disputed questions as to whether the complainant could be considered as a 'holder in due course' by virtue of the fact that the complainant purchased the cheque from the petitioners or not is to be decided only after letting in evidence by both the parties. In that view of the matter I hold that these disputed questions of fact are to be agitated only before the learned magistrate by letting in evidence by either parties. Therefore, without deciding the issue that has been raised before me as to whether the complainant is a 'holder in due course' or not, I dismiss the petition by giving liberty to the parties to agitate the said issue also before the learned magistrate by letting in evidence.
5. In view of the above finding, I do not propose to go into the various other legal submissions made by learned counsel for the petitioners. Accordingly, the petition fails and the same is dismissed. Consequently, Criminal Miscellaneous Petition No. 4310 of 1999 is also dismissed.