Only the payee or holder in due course has standing to lodge a complaint under Section 138 of the Negotiable Instruments Act.

CR

ORDER

Dated this the 21^st day of August, 2023

This is a petition filed under Section 482 of the Code of Criminal Procedure .

2. The 2^nd accused in C.C.234/2016 on the files of the Judicial First Class Magistrate Court-IV, Ernakulam seeks quashment of complaint on the ground that the complainant has no locus standi to prosecute the 2^nd accused on alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act' for short)

3. Heard. Perused the relevant documents.

4. The learned counsel for the petitioner submitted that Annexure F, F1 and F2 cheques for Rs.50,000/-, Rs.1,00,000/- and Rs.1,00,000/- respectively, where from the prosecution emanates, were issued in the name of 'Intersight Tours and Travels Pvt. Ltd'. But on dishounour of the cheque, the Director of Intersight Holidays Pvt.Ltd. issued legal notice and complaint also was filed by Intersight Holidays Pvt.Ltd.

5. In view of the submission, the question arises for discussion is whether a third party can prosecute the drawer of cheque for the offence punishable under Section 138 of the NI Act ?.

6. On perusal of Annexure F, F1 and F2 cheques in comparison with Annexure G legal notice and Annenxure H copy of complaint, the submission appears to be convincing. That is to say, Annexure F, F1 and F2 cheques were issued in the name of 'Intersight Tours and Travels Pvt. Ltd' and the name of the complainant is 'Intersight Holidays Pvt.Ltd.'

7. The learned counsel for the respondents also could not justify filing of complaint by Intersight Holidays Pvt.Ltd. in relation to three cheques issued in favour of Intersight Tours and Travels Pvt. Ltd.

8. On perusal of the complaint, nothing stated as to change of name of 'Intersight Tours and Travels Pvt.Ltd.' to 'Intersight Holidays Pvt.Ltd.' As per Section 142 (a) of the NI Act, no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. Therefore, a complaint alleging commission of offence punishable under Section 138 of the NI Act shall be filed either by the 'payee' or by the 'holder in due course' of the said cheque and no other person entitled to lodge a complaint and the court shall take cognizance acting on a complaint in writing filed by the 'payee' or 'holder in due course'

9. In the present complaint, nothing stated that the complainant even though is not a 'payee', he is the 'holder in due course' of Annexure F, F1 and F2 cheques, as defined under Section 9 of the N.I.Act that “Holder in due course” means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order, 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 whom he derived his title.

10. Thus, prima facie, it appears that the present complainant has no locus standi to prosecute the second accused in terms of Section 142 (a) of the N.I.Act and as such, the complaint is liable to be quashed. Therefore, I am inclined to invoke the power under Section 482 of Cr.P.C. in this particular case and accordingly, this petition stands allowed.

It is ordered that the complaint against the petitioner pending before the Judicial First Class Magistrate Court-IV Ernakulam as C.C.No.234/2016 and the proceedings thereof stand quashed.