DEEPAK LAKHANI Vs. STATE

JUDGEMENT

(1.) IT is a petition for quashing of the complaint under Section 138 of the Negotiable Instruments Act on the ground that the petitioner herein, is not the drawer of the cheque, which was dishonoured.

(2.) COUNSEL submits that the Company of which the petitioner is a director, endorsed the Instrument in favour of the complainant by way of a covering letter and thereby became the drawer and the complainant has become holder of the same Instrument. He submits that Section 138 of the Negotiable Instruments Act has to be read in the scheme of the Act and not in isolation. The cheque is a negotiable instrument capable of being endorsed, in discharge of liabilities in the event the instrument is endorsed the liability/duty to ensure its creditworthiness passes on to the person who has endorsed the instrument and passed it on as a discharge of his liability.

(3.) COUNSEL further submits if a narrow interpretation is given to Section 138 of the Act, the very purpose of its enactment can be defeated by negative ingenuinity. Whether the cheque was endorsed as a ploy and with knowledge that the cheque will not be honoured, are all questions that will arise for consideration. These cannot be brushed aside without a trial. He refers to judgment of Supreme Court in NEPC Micon Ltd. and ors. us. Magma Leasing Ltd. 1999 (1) JCC (SC) 234, in particular to para 15 thereof.