High Court
Legal Reasoning
corrected-Crwp1337-22.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCRIMINAL WRIT PETITION NO. 1337 OF 2022Abhijeet s/o Jairaj PathrikarAge 39 years, Occu: BusinessR/o Plot No.32, Sahakar Nagar,Aurangabad ...Petitioner(Original complainant)VERSUS1.State of Maharashtra2.Mama Stone Metal Works,Through its proprietorIshwar s/o Govindrao ShirsatAge 55 years, Occu: Business,R/o Flat No.10, Sneha ApartmentNear Maria Hospital, Bansilal Nagar,Aurangabad...RespondentsR/2 Original accused)Ms. Ranjita Barhate h/for Mr. Y. R. Barhate, Advocate for the Petitioner,Mr. S. B. Narwade, APP for the Respondent No.1 StateMr. S. S. Thombre, Advocate for Respondent No.2 CORAM : Y. G. KHOBRAGADE, J.RESERVED ON : 21.11.2024PRONOUNCED ON: 29.11.2024JUDGMENT:-1. Rule. Rule made returnable forthwith and with the consent of boththe parties, heard finally.2. By the present writ petition under Article 227 of the Constitution ofIndia r/w Section 482 of the Criminal Procedure Code, the petitionerimpugned the order dated 27.11.2021 passed by the learned AdditionalPage 1 of 15 corrected-Crwp1337-22.odtSessions Judge, Aurangabad, in Cr. Revision No.282 of 2019, therebyquashed and set aside the order of issuance of process passed on24.07.2019 by the learned JMFC, Court No.20, Aurangabad, in SSCNo.4961/2019.3. The Petitioner/ori., complainant filed a complaint bearing SCC No.4961 of 2019 u/s Sec. 138 of Negotiable Instruments Act and alleged that,he is legal heir of Shri Jairaj Annasaheb Pathrikar. He filed said complaintand alleged that, the Respondent No. 2/Oril Accused issued three chequesbearing Nos. (1) 817746 of Rs.3,00,000/- dated 09.01.2019, (2) 817747of Rs.2,00,000/- dated 09.01.2019 and (3) 817748 of Rs.2,50,000/-,dated 30.01.2019, drawn on State Bank of India, Branch Maliwada Tq. &Dist. Aurangabad in favour if his father Shri Jairaj Annasaheb Pathrikar fordischarging legal liabilities in pursuance of registered Agreement to saledated 20.08.2018 at Sr. N.4928 and registered General Power of Attorneyat Serial No.4930 dated 20.08.2018 in respect of sale of Land bearing GatNo.76 to the extent of 1 Hectare 22 Gunthas situated at village JambhalaTq. Gangapur, district Aurangabad. Since his valuable rights are involvedin said agricultural land, the complainant and his father have raisedobjection for registration of the sale deed. Thereafter, the accused, throughits proprietor approached him and his father. After due negotiations, theaccused agreed to pay an amount of Rs.7,50,000/- to the complainant andPage 2 of 15 corrected-Crwp1337-22.odthis father. Accordingly, on 08.01.2019, the complainant and his fatherexecuted Consent Deed in favour of the accused in presence of twowitnesses. The said consent deed duly registered with Notary at SerialNo.20 of 2019.4.The Petitioner/complainant further alleged that, at the time ofexecution of the consent deed, the respondent No.2/Accused agreed topay an amount of Rs.7,50,000/- to him and his father by way of cheque.Accordingly, the accused, in the capacity of proprietor of the firm, issuedabove three cheques in favour of his father. Accordingly, his father ShriJairaj Annasaheb Pathrikar presented said cheques for encashment withhis Banker i.e. Bank of Baroda, Aurangabad Branch, however, all abovecheques are returned unpaid with the endorsement of "Payment stoppedby Drawer" vide Bankers Memo dated 13.02.2019. Therefore, his fatherShri Jairaj Annasaheb Pathrikar issued a mandatory notice u/s 138 of N.I.Act, by RPAD on 22.02.2019 and called upon the respondent No.2/accused to make payment under dishonoured cheques to the tune ofRs.7,50,000/- within a period of 15 days from the date of service ofnotice, which duly served upon the accused on 23.02.2019 but therespondent/accused failed to comply with the notice. However, in themeantime, Shri Jairaj Annasaheb Pathrikar, the complainant’s fathersustained electric shock and died on 18.03.2019. Page 3 of 15 corrected-Crwp1337-22.odt5.Since the complainant being son and legal heir of deceasedJairaj Pathrikar and having knowledge regarding the transaction betweenhim, his father and the present accused, he has filed a complaint SCCNo.4969 of 2019 under Section 138 of the NI Act, due to dishonour ofabove cheques. On 24.07.2019, the learned JMFC, Court No.20,Aurangabad passed the order and issued process against the accusedunder section 204 of the Cr.P.C., for the offence punishable underSection 138 of the NI Act.6. Being aggrieved by the said order, the Respondent/accused filedCriminal Revision No. 282 of 2019 under section 397 of the Cr.P.C. beforethe Sessions Court. On 27.11.2021, the learned Sessions Court passed theimpugned judgment and order holding that, the cheques were issued infavour of Jairaj Pathrikar, the complainant’s father. Therefore, thepetitioner/complainant does not fall within the ambit of “payee” or“holder in due course” within the meaning of Sec. 9 of the NI Act. Further,the Petitioner/complainant is not armed either letter of administration orprobate or succession certificate after demise of his father. Therefore, thelearned Revision Court dismissed the complaint, considering the ratio laiddown by this Court in the case of Vishnupant s/o Chaburao Khaire Vs.KailasBalbhir Madan (Writ Petition No. 842 of 2099 dated 25.01.2010),wherein it has been held that when the complainant is not payee or holderPage 4 of 15
Legal Reasoning
corrected-Crwp1337-22.odtin due course within the meaning of law, he has no authority to demandmoney under Section 138 and he will not be entitled to file complaintunder section 142 of the NI Act.7. In above backdrop of the case in hand, a question arises that, can alegal representative of the payee file a complaint under Section 138 of theNI Act, when the holder in due crouse died after issuance of mandatorynotice under section 138 of the NI Act?8. Ms. Ranjita Barhate, the learned counsel appearing for thePetitioner, placed reliance on judgment in the case of Chandra Babu Vs.Remani, 2003 (2) DCR 347 equivalent to 2003(2) KLT 750, wherein,similar question was under consideration before the Division Bench ofKerala High Court. In the said case, the Division Bench of Kerala HighCourt considered the case of Padam Prasad Vs. Lok Nath Ishwar Sarup(AIR 1964 Punjab 497) and held that, complaint at the behest of legalheir of payee of the cheque is perfectly maintainable and legalrepresentative of the payee or holder in due course can file complaintunder section 138 read with Section 142 of the NI Act, if other conditionsin the above sections are satisfied.9.The learned counsel appearing for the Petitioner further relied onunreported Judgment/order dated 10.02.2023 passed by the CoordinatePage 5 of 15 corrected-Crwp1337-22.odtBench of this Court in Criminal Application No. 17 of 2023, TridhaatuMaruthi Developers LLP & Ors. Vs. Nirzari Rajiv Shroff & ors., wherein,the Coordinate Bench of this Court considered cases i.e. (i) JyotindraMotibhai Thakkar vs. State of Gujarat and Others reported inMANU/GJ/0927/2017;(ii) Ramashbhai Manibhai Patel and Others vs.State of Gujarat and Others reported in 2011 SCC OnLine Guj 7608; (iii)Vishnupant S/o. Chaburao Khaire vs. Kailash S/o. Balbhir Madan reportedin 2010(3) Mh.L.J. 259,(iv) Shankar Lal vs. Sanyogita Devi (Dead)through LRs. reported in Criminal Appeal No. 485 of 2002 decided on28/10/2009 and held that, the averment in the complaint indicates thatRespondent/complainant in cited case filed a complaint as she came intopossession of cheque in capacity of widow of the deceased RajivChandrakant Shroff. It is further observed that applicants accusedresponded to the demand notice. The respondent/complainant beingwidow of the deceased, by law of succession/inheritance, became payee/holder in due course of the cheque10. The learned counsel for the petitioner further placed reliance onjudgment of the Kerala High Court in case of Muhammedkutty, Vs. C.P.Sarasu w/o Lt. Sivanandan, dated 01.02.2007 in Cri. M.C. No. 250 of2007, wherein it has been held that, when a complainant dies, any fitperson can be permitted to prosecute the complaint who have beenPage 6 of 15 corrected-Crwp1337-22.odtbrought on record being legal heirs and they have certificate to show theheirship.11. Per contra, Mr. Thombre, the learned Advocate appearing forRespondent No.2/accused canvassed in vehemence that though thePetitioner/complainant is legal heir of deceased, holder of cheque in duecourse, but neither the cheques in question are issued in favour of thepetitioner/complainant nor mandatory notice under section 138 of the NIAct issued by the complainant. Further, the Petitioner has not obtainedsuccession certificate during pendency of complaint or Revision. Thecheques in question amount to debts and securities specified under section381 of the Indian Succession Act, therefore, to initiate proceedings forrecovery of debt/security and to initiate proceedings under Section 138,142 of the NI Act, succession certificate is necessary and in absence of saidcertificate, letters of administration or probate granted by the competentCourt to the complainant, no proceeding is maintainable. Therefore,findings recorded by the learned Revisional Court are just and proper,hence, prayed for dismissal of the petition.12. To buttress this submission, the learned counsel forrespondent No.2/accused placed reliance on case of Vishnupant s/oChaburao Khaire Vs. Kailas Balbhir Madan (supra), wherein, theCoordinate Bench of this Court held that the complainant is not a personPage 7 of 15 corrected-Crwp1337-22.odtnamed in the instrument nor he is a person to whom or to whose ordermoney by the instrument is directed to be paid. As a legal representativeof deceased father/payee, the Respondent /complainant is entitled topossess valuable security/ movable property left by his deceased fatherand also to receive or recover the amount thereunder. Therefore, only aperson who is authorized by succession certificate, letters ofadministration or probate granted by the court, is entitled to call upon thedrawer to pay the amount of dishonoured cheque, by issuing notice underproviso(b) to Section 138 of the N.I.Act and he would be then entitled tofile complaint under Section 142 of the Act as he would be then reallyentering into the shoes of the deceased payee.13. Reverting back to the facts of the present case, it is not in disputethat the respondent No.2 accused issued three Cheques Nos. (1) 817746of Rs.3,00,000/- dated 09.01.2019, (2) 817747 of Rs.2,00,000/- dated09.01.2019 and (3) 817748 of Rs.2,50,000/-, dated 30.01.2019, drawn onState Bank of India, Branch Maliwada Tq. & Dist. Aurangabad in favour ofShir Jairaj Annasaheb Pathrikar, who presented said cheques with hisBanker i.e. Bank of Baroda, Aurangabad Branch, however, all the abovecheques are returned unpaid with the endorsement that, "Paymentstopped by drawer" under Banker’s Memo dated 13.02.2019. TheRespondent no.2/accused has not denied about service of mandatoryPage 8 of 15 corrected-Crwp1337-22.odtnotice dated 22.02.2019 issued by the father of the complainant. It isalso not in dispute that, on 18.03.2019 before expiry of statutory periodcontemplated u/s 138 of N.I. Act, Shri Jairaj Pathrikar, the Petitioner’sfather died due to electric shock. Thereafter, the complainant being legalheir of deceased payee/holder filed a complaint SCC No. 4961 of 2019 forthe offence punishable under section 138 of the NI Act.14.It is matter of record that, after due compliance u/s 204 ofCri. P. C., the learned JMFC passed an order dated 24.07.2019 and issuedprocess against the respondent No.2/ accused for the offence punishableunder section 138 of the NI Act. On 27.11.2021, the learned RevisionalCourt passed the impugned order holding that though the complainant isson of deceased Jairaj Annasaheb Pathrikar but the petitioner/complainthas filed said complaint after demise of his father without obtainingsuccession certificate, letters of administration or probate. Therefore, thePetitioner/complainant has no authority to lodge the complaint.15. Needless to say that the Petitioner/complainant obtained legalheirs Certificate granted by the Civil Court in MARJI NO 366/2022 underthe provisions of Bombay Regulation Act, 1827 and produced the sameduring pendency of revision. The learned Civil Court endorsed that, thePetitioner and his mother Smt. Chhaya wd/o Jairaj Pathrikar are legalheirs of deceased Jairaj Pathrikar, who is holder of cheques in question. Page 9 of 15 corrected-Crwp1337-22.odt16. In case of Shankar Lal Vs. Sanyogita Devi, cited supra, theHon'ble Supreme Court of India held as under:"There is no provision under the Act which precludes the legalheir of the holder in due course of the cheque to file complaintunder Section 138 of the Act. In our opinion that a heir of thedeceased holder in due course of the cheque can bring actionon the basis of the cheque to recover the amount due thereonto the deceased holder by reason of the fact that he succeedsto the estate of the deceased holder by inheritance i.e.;operational of law and if that be so there is no reason as towhy the legal heirs cannot file complaint under Section 138 ofthe Act. There is, therefore, no reason on principle to holdthat a complaint filed by a legal heir of the original holder indue course of the cheque cannot be taken cognizance by thecourt. In our considered view, neither the cause of action northe right conferred upon the holder in due course of thecheque to proceed and file complaint under Section 142 of theAct or the offence under Section 138 of the said Act comes toan end after the death of the holder in due course of thecheque. The cause of action certainly survives as the legalheirs step into the shoes of the holder of the cheque in duecourse by operation of law and are entitled to prosecute andinitiate the proceedings under Section 142 of the Act."17. In Bhagava vs. Sri Kadasiddeshwara Trading Co. 2004 (1)Crimes, 701, Hon'ble High Court of Karnataka held as under:-"12. Having regard to the factual aspects and the settledprinciples of law in this regard, in the opinion of this Court, onthe death of the payee, his legal heirs steps into the shoes of thepayee for all practical purposes and such a person can also fileand prosecute the complaint after completing the legalformalities. It is also necessary to mention that it would bePage 10 of 15 corrected-Crwp1337-22.odtincumbent upon the Complainant to prove that the Complainantis the legal representative of the deceased payee, in the event ofaccused disputing the same. In the case on hand, the payee had died and the wife of thepayee, as the legal heir, had presented the cheque in questionand on the cheque being dishonoured, legal notice had also beenissued and thereafter, the proceedings had been initiated underSection 138 of the NI Act."18. In M/s. Sri Sai Mourya Estates & Projects Pvt. Ltd. & Othersvs. The State of A.P., 2018 SCC OnLine Hyd 43, it is held as under:"31. From the above provision, it is clear that the 2 andrespondent holds the cheque after the death of his father beingthe payee and as a legal heir he is entitled to possess the samein his own name and in view of Section 53 he is the holder indue course and can get a full discharge. Thus, under Section 53of the Act, a legal representative / heir of the payee or holderin due course can maintain a complaint under Section 138 ofthe Act."19. Though the the learned counsel appearing for Respondent No. 2accused relied on the case of Vishnupant s/o Chaburao Khaire, cited supra,however, in cited case ratio laid down by the Hon’ble Court in case ofShankar Lal Vs. Sanyogita Devi not cited.20. Section 9 of the NI Act provides definition of "holder incourse", means any person who for consideration became the possessor ofa promissory note, bill of exchange or cheque if payable to bearer, or thepayee or indorsee thereof, if payable to order, before the amountPage 11 of 15 corrected-Crwp1337-22.odtmentioned in it became payable, and without having sufficient cause tobelieve that any defect existed in the title of the person from whom hederived his title. 21 Section 138 of the NI Act provides Dishonour of cheque forinsufficiency, etc., of funds in the account, which reads as under:“Where any cheque drawn by a person on an account maintained by himwith a banker for payment of any amount of money to another personfrom out of that account for the discharge, in whole or in part, of anydebt or other liability, is returned by the bank unpaid, either because ofthe amount of money standing to the credit of that account is insufficientto honour the cheque or that it exceeds the amount arranged to be paidfrom that account by an agreement made with that bank, such personshall be deemed to have committed an offence and shall, withoutprejudice to any other provision of this Act, be punished withimprisonment for a term which may be extended to two years, or withfine 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 sixmonths from the date on which it is drawn or within the period of itsvalidity, whichever is earlier;(b) the payee or the holder in due course of the cheque, as the case maybe, makes a demand for the payment of the said amount of money bygiving a notice; in writing, to the drawer of the cheque, within thirty daysof the receipt of information by him from the bank regarding the return ofthe 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 duecourse of the cheque, within fifteen days of the receipt of the said notice.Explanation.-- For the purposes of this section, debt of other liability means a legally enforceable debt or other liability”.22. In case of Chandra Babu, cited supra, it is held that a holderPage 12 of 15 corrected-Crwp1337-22.odtof negotiable instrument who derives title from holder in due course has aright thereon of that holder in due course. Therefore, a holder derivingtitle from the holder in due course has all the rights of a holder in duecourse. Therefore, legal representative of a holder in due course has allthe rights of the holder in due course. If the original payee is holder indue course, his representative has all his right. Therefore, the rights undersections 138 and 142 of the NI Act are applicable to the legalrepresentatives also, if he derives title from the holder in due course.23. In the case of Smt. Bhagava, cited supra, the payee was died beforepresenting the cheque for encashment and the cheque was thereforepresented by his wife and on bouncing of the cheque, after completingformalities, widow of holder of cheque filed the complaint. In the abovefacts and circumstances of the case, it has been held that on death ofpayee, his legal heirs stepped into shoe of payee for all practical purposesand such legal heir could also file and prosecute complaint.24. Similarly, in case in hand, the holder in due course already issuedmandatory notice under section 138 of the NI Act but he died prior toinstitution of the complaint and the petitioner/complainant being a legalheir of holder of cheque/payee has instituted a complaint under Section142 of the NI Act. The provisions under the NI Act does not create a barPage 13 of 15 corrected-Crwp1337-22.odtor disqualify, the legal heir of the holder in due course of instrument toprosecute the complaint, if the holder in due course dies prior toinstitution of the complaint. Further, Sec. 138 or Sec. 142 of N.I. Act doesnot provide that, the legal heir of the holder in due course shall firstobtain the legal heir certificate or succession certificate and then institutea complaint, in case payee dies after issuance of mandatory notice u/s 130of NI Act. Therefore, ratio laid down in case of Vishnupant s/o ChaburaoKhaire Vs. Kailas Balbhir Madan (supra), does not apply to the facts andcircumstances of present case. However, considering the ratio laid down inthe case of Shankar Lal Vs. Sanyogita Devi, and Smt. Bhagava, citedsupra, legal heirs stepped into shoes of the holder of cheque in due courseby operation of law and is entitled to prosecute, initiate the proceedingsunder the provisions of Section 142 of the NI Act. However, in case inhand, the learned Revisional Court quashed and set aside the order ofissuance of process passed by the learned Magistrate only on ground thaton the date of filing of the complaint, the Petitioner/ complainant was notauthorized by succession certificate, letters of administration or probategranted by the Court. Therefore, to my considered view, findings recordedby the learned Revisional Court are not sustainable and liable to bequashed and set aside. Accordingly, present Petition needs to be allowed.Hence, I proceed to pass the following order:::ORDER::Page 14 of 15 corrected-Crwp1337-22.odt(1) Criminal Writ Petition No. 1337 of 2022 is allowed.(2) The impugned order dated 27.11.2021 passed by the learnedAdditional Sessions Judge, Aurangabad in Cr. Revision No.282of 2019, is hereby quashed and set aside.(3) The order dated 24.07.2019 passed by the learned JMFC, CourtNo.20, Aurangabad below Exh.1 in SSC No.4961/2019 forissuance of process under section 204 of Cr.P.C. for the offencepunishable under section 138 of the Negotiable Instruments Act,1881 is hereby restored. ( Y. G. KHOBRAGADE, J. )JPChavanPage 15 of 15