Judgment :

ALTAMAS KABIR, J.

1. Special Leave Petition (Crl.) No.5093 of 2008, has been filed by the Central Bank of India against the judgment and order dated 22.8.2007 passed by the Delhi High Court in Crl. M.C. No.5167 of 2003 allowing the said petition under Section 482 Cr.P.C. filed by the Respondents and discharging them and quashing the complaint filed by the Petitioner Bank and the process issued thereupon. By the said judgment, three other petitions, being Crl. M.C. No.5161 of 2003, Crl. M.C. No.5162 of 2003 and Crl. M.C. No.2166 of 2003, were also disposed of in favour of the Respondent Nos.1 and 2, M/s Asian Global Ltd. and its Director, Mr. Rajiv Jain. Several other petitions filed by Sarla Jain, a Director of the Respondent No.1 Company, also challenging the complaint filed by the Petitioner Bank and praying for discharge therefrom and quashing thereof, were allowed by the aforesaid judgment. Consequently, the Bank has also filed SLP (Crl.) Nos.5094, 5095 and 5096 of 2008, which are also being heard along with SLP(Crl.) No.5093 of 2008.

2. The facts as disclosed indicate that in 1993 the Respondent No.1 had availed of various credit facilities from the Petitioner Bank, including packing credit facility and overdraft facility. For whatever reason, the account of the Respondent No.1 is alleged to have become irregular compelling the Bank to call upon the Respondent No.1 Company to regularize its packing credit account. It appears that corporate guarantee for due repayment of the outstanding dues of the Respondent No.1 Company was given by the Respondent No.3 Company which was allegedly a sister concern of the Respondent No.1 and the Respondent No.2 while being a Director of Respondent No.1 Company was a Joint Managing Director of the Respondent No.3 Company.

3. In order to discharge its liability to the Petitioner Bank, the Respondent No.3 Company issued Cheque No.255242 dated 16.5.1996, along with three other cheques, each for a sum of Rs.5 lakhs in favour of the Respondent No.1 Company which was deposited by the Respondent No.1 Company with the Petitioner Bank towards the outstanding dues of the Respondent No.1 Company. On being presented for encashment on 16.5.1996, the said cheques were returned to the Petitioner Bank with the remarks "funds insufficient". On the request made by the Respondents, the cheque was again presented for payment on 31.7.1996, but was again returned by the New Delhi Gulmohar Park Branch of the Petitioner Bank with the remark "since account closed". It is only thereafter that the Petitioner Bank filed a complaint against the Respondents under Sections 138 and 139 of the Negotiable Instruments Act, 1881, read with Section 120-B and 420 I.P.C., upon which cognizance was taken by the Additional Chief Metropolitan Magistrate, Patiala House, New Delhi, on 27.1.2001.

4. Aggrieved by the order issuing summons, the Respondent Nos.1 to 3 and other accused persons, being the Directors of the Respondent Nos.1 to 3 Companies, moved an application under Section 245(2) Cr.P.C. praying for recall of the order issuing summons and consequent discharge from the criminal proceedings initiated on the complaint filed by the Petitioner Bank on the ground that there was no privity of contract between the Petitioner Bank and the Respondent No.3, Asian Consolidated Industries Ltd. (ACIL). On the other hand, the Petitioner Bank took the stand that being a "holder in due course", the Bank was entitled to maintain its complaint.

5. By its order dated 28.7.2003 the Trial Court rejected the application filed by the Respondents for discharge upon holding that under Section 118(E) of the Negotiable Instruments Act, 1881, hereinafter referred to as "the 1881 Act", a "holder" of a cheque is presumed to be a "holder in due course" unless and until the contrary is proved by the accused.

6. Being aggrieved by the said order dated 28.7.2003, the Respondent Nos.1 and 2 moved the Delhi High Court under Section 482 Cr.P.C. in Crl