Legal representatives need valid authority to file complaints under the Negotiable Instruments Act after the payee's death.

O R D E R

(30/04/2019)

The aforesaid petitions under Section 482 of the Cr.P.C. have been preferred by the petitioner seeking quashment of the order dated 24.4.2018 passed by JMFC Bhopal in separate criminal complaint cases registered under section 138 of the Negotiable Instruments Act , 1881, (hereinafter referred to as 'the Act') whereby cognizance of the offence punishable under section 138 of the Act has been taken on the complaint filed by the respondents as legal heirs of Narendra Kumar Jain, who was the payee of the cheques in question.

2. In all the aforesaid petitions, a common question is involved viz. :-

I) Whether the legal heirs of the payee are competent or eligible to file complaint against the petitioner/accused as they are not payee or holder in due course, therefore, the complaints are not maintainable.

3. The petitioner has placed reliance on the Single Bench judgment of the Bombay High Court in the case of Vishnupant Vs. Kailash reported in 2010 Cr.L.J. 2166, wherein it is held that the legal representatives of payee can file a complaint after getting succession certificate, letters of administration or probate granted by the Court. In absence thereof, he/she or they would be entitled to give full discharge and indemnity to the drawer of the cheque as required under section 82 of the Act and sections 211, 273 and 381 of the Indian Succession Act. Unless he can give such indemnity it cannot be said that he/she/they has/have authority to issue notice and non-payment of amount mentioned in the notice within 15 days as required under section 138 of the Act.

4. Petitioner has further placed reliance upon the Single Bench judgment of the Gujrat High Court in the case of Jyotindra Motibhai Thakkar Vs. State of Gujarat , in Special Criminal Application No.956/2013 wherein after relying on the judgments of various High Courts, the learned Single Judge has held as under :-

“6.1 The legal connotation “holder in due course” has twin important essentials to carry. A person in order to become a holder in due course within the meaning of Section 9 of the Act must be in possession of a promissory note, bill of exchange or cheque, as is in the present case; at the same time, mere becoming possessor of the cheque etc., would not suffice. A person to the possessor of the instrument has to be for a consideration. It is indispensible ingredient for being clothed with the legal capacity of “holder in due course” is that the person in possession of the instrument, must have been in the possession for some consideration.

6.2 Therefore, it logically falls that merely being an heir of payee, though may be in possession of instrument, would not automatically make such heir or legatee a 'holder in due course' within the meaning of Section 9 of the N.I. Act. The concept of holder in due course does not recognize such position, besides which the ingredient of being a possessor for consideration has to exist. Respondent No.2 wife, in absence of possessing such ingredient-capacity, cannot claim locus standi in law to become a complainant under Section 138 of the Act.

6.3The claimed capacity of heir or legatee or right to inheritance by themselves would not attract or invest the person in possession of the instrument with the capacity as 'holder in due course' under the N.I. Act. Therefore upon death of the payee, heir of legatee thereof does not step into the shoe of the deceased payee merely because he happens to be an heir or a relative or a legatee. Such person unless is in possession of the instrument and unless such possession is for consideration, cannot file a complaint posing himself or herself as legal heir”.

5. In the present cas