Naveen Malhotra & Anr. vs Govt. Of Nct Of Delhi & Anr.
2019 Latest Caselaw 3802 Del

$~ 26
        IN THE HIGH COURT OF DELHI AT NEW DELHI
                                         Decided on:- 19th August, 2019

+       Crl.M.C. 3993/2017

        NAVEEN MALHOTRA & ANR.           ..... Petitioners
                    Through: Mr. Chetan Lokur & Mr. Nitish
                             Chaudhary, Erstwhile Advs.

                              versus

    GOVT. OF NCT OF DELHI & ANR.           ..... Respondents
                  Through:   Mr. Sanjeev Sabharwal, APP
                            for the State.
                            Ms. Suruchi Aggarwal, Adv.
                            for R-2.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA

                          ORDER (ORAL)

1. On the criminal complaint (earlier CC no. 4024/2013 - now CC no. 629398/2016) instituted by the second respondent bank (the complainant), after preliminary inquiry, the petitioners herein were summoned as accused, by order dated 16.03.2013, of the Metropolitan Magistrate, calling them upon to answer the accusations of offence under Section 138, Negotiable Instruments Act, 1881, the cheque no. 569843, issued on 22.12.2012 for an amount of Rs. 2.42 crores, under the signatures of the first petitioner being its subject matter. The petitioners having put in appearance, moved application under Section 254 of the Code of Criminal Procedure, 1973 (Cr.P.C.) before the trial court seeking discharge primarily on the submission that the cheque

had been issued not in favour of the complainant bank but in favour of M/s Star Bazar (P) Ltd. (second petitioner), it having been submitted to the bank by voucher for credit in favour of "Star Bazar - CC A/C". The plea that the complainant bank had no locus standi to bring a case of offence under Section 138, Negotiable Instruments Act, 1881 on its basis was rejected by the Metropolitan Magistrate, by order dated 31.03.2014.

2. The above said order was assailed in the court of Sessions by criminal revision no. 51/2014, but without success, the petition having been dismissed by the revisional court, by its order dated 22.12.2014. Noticeably, both the courts followed the dictum in Bank of India vs. State & Ors. 2010 VII Apex Decision Delhi 885, 2010 SCC Online Del 3097.

3. The present petition invoking the inherent power and jurisdiction of this Court under Section 482 Cr.P.C. was preferred seeking quashing of the orders dated 16.03.2013 and 31.03.2014 of the Metropolitan Magistrate, and the order dated 22.12.2014 of the revisional court.

4. The petition has been pending since September, 2017, it being resisted by the second respondent by a counter affidavit sworn on 11.02.2019. When the matter came up for hearing, the counsel for the petitioner sought discharge on the ground that the petitioners inspite of due notice, have failed to instruct him further. On the matter being called out and kept in wait, there is no appearance on behalf of the petitioners. Given the fact that when this matter has been pending for almost two years and this would have had a bearing on the

proceedings pending before the trial court, there is no good reason to adjourn.

5. Having heard and perused, this Court finds no merit in the petition.

6. Against the above backdrop, question arose as to whether the petitioner having availed of the remedy of revision should be allowed to have recourse to the petition at hand as a substitute for virtually a second revisional challenge or scrutiny which is clearly barred under Section 397 (3) Cr.P.C.

7. This Court in an almost similar fact-situation, taking note of the decisions of the Supreme Court reported as Krishnan Vs. Krishnaveni, (1997) 4 SCC 241; Rajinder Prasad Vs. Bashir, (2001) 8 SCC 522 and Kailash Verma vs. Punjab State Civil Supplies Corporation & Anr., (2005) 2 SCC 571 and following similar view taken by a learned single Judge of this Court in Surender Kumar Jain vs. State & Anr., ILR (2012) 3 Del 99, 2012 SCC Online Del 571 in absence of a special case being made out had earlier declined to interfere by the ruling (dated 03.07.2018) in Crl.M.C. 164/2018, 2018 SCC Online Del 10058 Ajay Maini vs. The State Govt. of NCT of Delhi & Ors. in exercise of extraordinary jurisdiction under Section 482 Cr.P.C

8. There are no special circumstances made out in the case at hand for the revisional court's view to be disturbed.

9. Even otherwise, the decision of a learned single judge of this Court in Bank of India (Supra) applies on all fours to the case at hand. In the said decision, the expression "holder in due course" defined in

Section 9 of Negotiable Instruments Act, 1881 was construed and it was held thus:-

"5.It is apparent from this definition 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. There is no doubt that endorsee or the payee of such a bill or cheque are also considered as „holder in due course‟, but, it is not the case that payee or endorsee alone are holders in due course. A person whose banking account is overdrawn if negotiates with his bankers a cheque, drawn by a third party, to reduce the overdraft, the banker becomes a holder for value of the cheque. The pre-existing debt of the overdraft is a sufficient consideration for the negotiation of a cheque to the banker. If a person handovers cheque to the bank with the clear understanding to the bank that cheque is towards the debt payable by the company, though the cheque remains in the name of the company but the bank becomes holder of the cheque in due course. What is to be seen is that whether the bank has come into possession of the cheque for a value pursuant to a contract between the parties express or implied. The credit given by a bank to its customer can be discharged by any third person and when the third person issues cheque in the name of the customer assuring bank that this would wipe out the overdraft or the other dues payable by the customer then the cheque in the hands of the bank is for consideration and the bank is "holder in due course‟. It is not necessary that the cheque should be endorsed in favour of the bank. What is to be seen is if the bank becomes holder for value and comes in possession of the instrument for consideration. The existing debt is always considered as a valid consideration. In India Saree Museum vs. P. Kapurchand, 1991 (1) BC 344, Karnataka High Court held that it is not only the endorsee who becomes a holder in due course but also a person who gets possession of the

negotiable instruments for consideration, which means, he need not be an endorsee to be a holder in due course. Once it is established to the satisfaction of the Court that the cheques were issued for discharge of the debt of the company, the bank who had given this debt to the company would be considered as "holder in due course‟. The "holder in due course‟ of cheque means any person entitled to receive or recover the amount due thereon from the parties thereto".

(emphasis supplied)

10. As was pointed out by the learned counsel for the complainant, the liability arose on account of overdraft made from the cash credit facility granted to the second petitioner by the afore-mentioned account maintained by it. The money which was tendered through the cheque in question was owed to the bank on account of such overdraft. The liability was being discharged, only the money being routed to the bank through the cash credit account against which the overdraft was made.

11. In view of the above, there is no error or infirmity in the view taken by the two courts below. The contentions are devoid of substance and so the petition and the pending application are dismissed.

R.K.GAUBA, J.

AUGUST 19, 2019 nk