Can a person who is not the payee and not an indorsee is entitled to file a complaint under section 138 of Negotiable Instruments Act. This is the question to be settled in the revision.

1. 2. Facts are admitted. Revision petitioner issued Ext.P1 cheque for Rs.1,00,000/- in favour of Krishnadas. First respondent claiming that for consideration he received the cheque from the brother of the payee as the payee is out of India, presented the cheque for encashment and as it was dishonoured for want of sufficient funds, sent Ext.P4 notice demanding the amount and on the failure, lodged the complaint, which was taken cognizance by the learned Magistrate. Revision petitioner pleaded not guilty. Learned Magistrate on the evidence of first respondent as Pw1 and Exts.P1 to P6 found revision petitioner guilty and convicted and sentenced him for the offence under Section 138 of Negotiable Instruments Act. Revision petitioner challenged the conviction before Sessions court, Alappuzha in Crl.A.778/2005. Learned Sessions Judge rejecting the case of revision petitioner that first respondent is not a holder in due course and therefore is not entitled to file a complaint under Section 142 Negotiable Instruments Act, dismissed the appeal. It is challenged in the revision.

2. 3. Learned counsel appearing for revision petitioner and first respondent were heard.

4. Learned counsel appearing for revision petitioner relying on Sub Section (a) of section 142 of Negotiable Instruments Act argued that no court shall take cognizance of an offence punishable under Section 138 except upon a complaint in writing made by the payee or holder in due course of the cheque and under Section 9 of Negotiable Instruments Act a holder in due course of a cheque, if payable to order could only be the indorsee thereof and when first respondent is neither the payee nor the indorsee, learned Magistrate is not competent to take cognizance of the offence and therefore the conviction is bad. Learned counsel pointed out that under Section 15 of Negotiable Instruments Act indorsement is provided for as the maker or holder of a negotiable instrument signs the same for the purpose of negotiation on the back or face thereof or on a slip of paper annexed thereto or so signs for the same purpose a stamped paper intended to be completed as the negotiable instrument, he is said to indorse the same and is called the indorser and under Section 46 of Negotiable Instruments Act delivery is defined and under the said section a cheque payable to bearer is negotiable by delivery and a cheque payable to order is negotiable by the holder by indosrsement and delivery thereof and Section 48 mandates that a cheque payable to order is negotiable by the holder by indorsement and delivery thereof and when admittedly there is no indorsement in Ext.P1 cheque in favour of first respondent, first respondent cannot be holder in due course and therefore complaint is not maintainable. Reliance was placed on the decision of apex court in Shankar Finance and Investments V. State of A.P and Others (2008 (8) SCC 536) and it was submitted that decision of Apex court in Punjab & Sindh Bank v. Vinkar Sahakari Bank Ltd. (2001 (3) KLT 533) is not applicable to the facts of the present case and as first respondent is not the holder in due course, conviction is not sustainable. Learned counsel appearing for first respondent argued that under Section 9 of the Negotiable Instruments Act, a person who for consideration became a payee of a cheque before the amount mentioned in it became payable and without having sufficient cause to believe that any defect existed in the title of the person from who he derived his title, is a holder in due course and as held by Apex court in Punjab & Sindh Bank’s case (supra) a person who possesses the cheque for consideration is a holder in due course and therefore learned Magistrate is competent to take cognizance of the offence and so the conviction is perfectly maintainab