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2000 Supreme(Bom) 152
IN THE HIGH COURT OF BOMBAY
T.K. Chandrashekhara Das, J.
M/s. Credential Finance Ltd. others..... Petitioners.
Versus
State of Maharashtra another..... Respondents.
Criminal Writ Petition No. 1541 of 1999 with Criminal Writ Petition No. 1542 of 1999, decided on 1-3-2000.
Advocates appeared :
K.R. Bulchandani with J.P. Shah i/by Kamal and Co., for the petitioners.
Mrs. Vandana Jaishingh, for respondent.
S.G. Rajput, A.P.P., for State.
Headnote:Sections 138, 123, 125 and 131Cheque dishonoured-Issuance of cheque by petitioner to Bank-Filing of complaint by Bank-Claim of 1st payee contended-Issuance of cheque under Section 7 of Act either to Banker or to party does not fall under category of one. party-Notice to drawer from payee necessary-Non-filing of complaint by payee is not maintainable.-In the definition of payee, as defined was in Section 7 a cheque cannot be drawn in joint names of two persons. It is to be noted that the word used is person which is in singular form and therefore, if in the cheque it appears that in Payees column, two names it does not fall in the ambit of definition of payee because it does not come in the form of the definition of payee. In that context that it cannot be called as a cheque at all. This is one way of looking at it.
That the banker on whom cheque specifically drawn has a duty to the customer. Explanation to Section 131 makes it clear that the bankers receives payments of a crossed cheque for a customer within the meaning of this section notwithstanding that he credits his customers account with the amount of the cheque before receiving payment thereof. Therefore, the cheque in the light of the above statutory provisions, it can be seen that the cheque "vas specially crossed on the respondent bank with implied directions to send the cheque for encashment and after encashment do credit the amount to the account of the customer. It is not disputed by both the parties that it is practice in the commercial world that writing of the cheque as done in Exh. "Au in this case. Admitted facts of the case shows that legal implications arising out of crossing the cheque specially, has been complied with by the respondent bank.
The Revisional Court has considered this aspect and noted that respondent bank has carried out this direction of the petitioner and credited the amount in his account and thereafter when the cheque was dishonoured, the amount was debited. Therefore, respondent bank cannot argue that the cheque is issued in its his favour. If that be so, there is no necessity for them to credit the amount in the petitionerss account. Therefore, it is crystal clear that the cheque was. drawn in all practical and legal sense in petitioners own name by till petitioner on Federal Bank to be deposited in the account of petitioners which he maintains in the respondent bank. Therefore, by any stretch of imagination, the cheque cannot be treated as the cheque issued by the petitioner in favour of the respondent bank. If the cheque is not issued by the petitioner in favour of the respondent bank, the question whether that was issued for discharge of liability of the petitioner with the respondent bank or was it dishonoured for want of fund ete. became otiose.
Unless these five factors have been cumulatively established before the Court by the complainant no complaint under Section 138 will be maintainable, If any one of the factors is lacking, such complaint is not maintainable. As Court indicated earlier, the complaint filed in this case has not been filed by the payee and the payee has not given any notice. Therefore, two important factors which are required to be present in this case are lacking. Therefore, Court has no hesitation to hold that the Magistrate was right in discharging the petitioners in observing that the essential ingredients required to be fulfilled by the complainant to maintain the complaint under Section 138 of the Negotiable Instruments Act is lacking in this case.
-Sections 138, 124 and 126 and Explanation to Section 131.-Cheque drawn by account holder was specially crossed on the Bank with implied direction to send cheque for encashment and credit the amount in his account-By no stretch of imagination the cheque can be treated as the cheque issued by the account holder in favour of Bank for discharge of his liability towards the letter of credit facilities provided to him-Complaint under Section 138 by Bank, which was not the payee, therefore not maintainable-To maintain complaint, the same has to be filed by the payee and the payee has to give notice.
2.It is alleged by the respondent Bank namely Indusind Bank Limited that they have provided petitioners Letter of Credit facilities and he availed that facilities to the tune of Rs. 8 crores and towards this liability aforesaid cheques were issued. According to the respondent, cheques were dishonoured for insufficiency of funds and therefore, the complaint came to be filed before the Magistrates Court. For the purpose of the narration of facts I rely on the facts of the Writ Petition No. 1541 of 1999. Exh. "A" to the writ petition is the cheque in question drawn by the petitioner. It is dated 11-11-1997 drawn on Federal Bank Ltd., Fort, Mumbai. In the payee column it is written "Indusind Bank Limited A/c. Credential Finance Limited or Bearer" and is drawn and signed by the Directors for Credential Finance Limited. A discharge application has been filed by the petitioner before the Magistrate. The contention raised by the petitioner before the Magistrate was that in the cheque petitioner himself who is the drawer of the cheque is shown as payee and in order to maintain a complaint, under section 138 of the Act, it should be filed by the payee. Since the respondents are not payee, the complaint under section 138 is not maintainable. The Magistrate accepted this contention and discharged the petitioner by its order dated 14th September, 1998. This order was challenged under revision by the respondent in Criminal Revision Application No. 670 of 1998. By an order dated 18th August, 1999, the Revisional Court set aside the order of the Magistrate and directed the parties to go for trial. It is in this circumstances, that the petitioner has approached this Court to challenge the order of Revisional Court by way of this writ petition.
3.Mr. Bulchandani learned Counsel for the petitioner submits that the cheque in question was crossed specially under section 124 of the Negotiable Instruments Act and as per the mandate contained in section 126 the banker on which it was crossed has statutory duty of remitting that amount in the accounts of holder shown on the face of the cheque. In substance, the learned Counsel for the petitioner has contended that even though the respondent's name was shown in the column of payee, actually it is crossed specially authorising respondent bank to encash the cheque and credit in petitioner's account. Therefore, since the respondent is not payee bank, and in fact the payee in this case is petitioner himself, in the absence of complaint filed by the payee as spelt out in section 138 of the Negotiable Instruments Act, the complaint is not maintainable and the Revisional Court has committed serious error in setting aside the order of the Magistrate discharging the petitioner.
4.The learned Counsel for the respondent Mrs. Vandana Jaisingh submits that the cheque in question was issued for discharge of the liability of the petitioners with the Indusind Bank and it is on the understanding and promise made by the petitioner that the cheque was issued in favour of the respondent ba
