VISHNUPANT CHABURAO KHAIRE Vs. KAILASH BALBHIR MADAN

JUDGEMENT

(1.) By filing CRR 1600 of 2015 the petitioner has prayed for quashing of the criminal proceeding of Complaint Case No. C/14698 of 2014 pending before the court of learned Judicial Magistrate, 8th Court, Alipore. Similarly, by filing CRR 2151 of 2015 the petitioners have prayed for quashing of the criminal proceeding of Complaint Case No. C/15539 of 2014 pending before the court of learned Judicial Magistrate, 4th Court, Alipore. Both the criminal proceedings arise out of the transaction between the Opposite Party No. 2 and the petitioners and as such I am inclined to dispose of both the revisions by this common order.

(2.) It appears from the materials on record that the Opposite Party No. 2 filed two petitions of complaint against M/s. Jayshree Polytex Limited (in short the accused company) and three Directors of the said company on the allegation of committing offence punishable under Sections 138/141 of the Negotiable Instruments Act. It is alleged by the Opposite Party No. 2 that the accused company represented by three Directors including the petitioner-Madhur Jhawar opened one credit facility account in the Opposite Party/Bank which sanctioned credit facility of Rs. 350 lakh and disbursed an amount of Rs. 327 lakh in favour of the accused company till March 31, 2014. It is further alleged that all three Directors of the accused company including the present petitioners stood guarantors for discharge of liability of the accused company. It is also alleged in the petitions of complaint that the accused No. 2, namely, Om Prakash Jhawar issued two Account Payee Cheques amounting of Rs. 2 lakh and Rs. 4 lakh in favour of the accused company to facilitate repayment of liability of the credit facility account of the accused company and the said cheques were dishonoured for insufficient of fund and the amount of cheques was not repaid after issuance of notice. So, the Opposite Party/Bank has started two separate proceedings against the accused company and its three Directors including the present petitioners for the offence punishable under Sections 138/141 of the Negotiable Instruments Act. Learned counsel representing the petitioners contends that the Opposite Party/Bank is neither the holders of the cheques nor "holders in due course" under section 9 of the Negotiable Instruments Act and as such the Opposite Party/Bank has no authority under the law to prosecute the petitioners for the offence punishable under Sections 138/141 of the Negotiable Instruments Act. The decision of Bombay High Court in "Vishnupant Chaburao Khaire v. Kailash Balbhir Madan" reported in 2010 Cri.L.J. 2166 is cited by learned counsel for the petitioners in support of the contention that the Opposite Party/Bank is not "holder in due course" under section 9 of the Negotiable Instruments Act. On the other hand, learned counsel for the Opposite Party/Bank submits that the credit facility is granted in favour of the accused company on condition of deposit of certain amount of money in the account of the accused company and all the Directors of the accused company stood guarantors for the said credit facility issued by the Opposite Party/Bank in favour of the accused company. According to learned counsel for the Opposite Party/Bank, the Opposite Party/Bank is the "holder in due course" under section 9 of the Negotiable Instruments Act and as such the Bank is authorized under the law to prosecute not only the accused company but also its Directors for dishonour of the cheques issued by them in favour of the accused company.

(3.) The first question for determination of the court is whether the Opposite Party/Bank is "holder in due course" as laid down in section 9 of the Negotiable Instruments Act. section 9 of the Negotiable Instruments Act, 1881 lays down as follows: