(1.) Can the legal representatives of the payee file a complaint under S.138 of the Negotiable Instruments Act (hereinafter referred to as the Act) is the question to be considered in this case. It is alleged that petitioner in this case borrowed an amount of Rs. 25,000/- from the husband of the respondent and issued a cheque No. 556736 drawn on Syndicate Bank, Sreekaryam Branch dated 4.4.1995 for the discharge of that debt. Respondents husband (payee) died on 15.4.1995 after 11 days of issuance of the cheque. Respondent wife and the legal heirs of the late Sudevan presented the cheque before the said bank on 29.9.1995. On 4.10.1995 the cheque was returned unpaid to the respondent / complainant on account of insufficiency of funds in the account of the petitioner / accused. On the same day, respondent issued a legal notice calling upon the petitioner / accused to repay the amount covered by the cheque. The notice was acknowledged by the petitioner / accused on 9.10.1995. Since cheque amount was not paid, a complaint dated 6.11.1995 was filed before the Judicial Magistrate of the First Class - III, Thiruvananthapuram. It was numbered as S.T. No. 4 of 1996. For issuance of another cheque for Rs. 80,000/- another complaint was filed which was numbered as S.T. No. 6 of 1996. For issuance of cheque for Rs. 50,000/-, S.T. No. 7 of 1996 was filed. In all these cases, cheques were returned on the ground of insufficiency of funds. This Criminal Miscellaneous Case was filed under S.482 of the Code of Criminal Procedure for quashing the above Annexures A1 to A3 private complaints filed under S.138 of the Act contending that the complainant cannot file such complaints as she is not the payee or holder in due course. Petitioner also relied on the decision of this Court in Koya Moideen v. Hariharan ( 1996 (1) KLT 389 ). It is also pointed out that this Court has already quashed a similar complaint filed by the same complainant in Crl.M.C. No. 3382 of 1999 in view of the decision reported in Koya Moideen v. Hariharan (1996 (1) KLT 389). When the matter came up before the learned Single Judge, Mr. R. Basant (J.), noticing the decisions in Janaki v. State of Kerala, ( 1976 KLT 182 ) and Devi v. State of Kerala, 1977 KLT 781 , wherein this Court held that, in law, a legal representative is not a different person from the deceased, the learned Judge was of the opinion that the payee in S.7 and 142 of the Negotiable Instruments Act would include the legal heirs of a deceased payee and the matter was referred to the Division Bench.
(2.) Mere issuance of a cheque without funds in the bank will not constitute an offence under S.138 of the Act. To constitute an offence under S.138, the cheque should be dishonoured for insufficiency of funds if the cheque is presented within a period of six months from the date on which it is drawn from the period of its validity whichever is earlier. Two other conditions are also to be satisfied to constitute an offence under S.138 of the Act. Those conditions which are relevant for the purpose of this case are contained in proviso (b) and (c) of S.138 of the Act which are as follows:
(b) the payee or the holder in due course of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. (underlining for emphasis.)
The above would show that the payee or the holder in due course should make a demand for the payment of such money by giving notice in writing to the drawer of the cheque within fifteen days of the receipt of information regarding dishonour of the cheque and drawer of such cheque should have failed to make payment of the said amount of money to the payee or the holder in due course of the cheque within fifteen days from the date of receipt of such notice. S.142 of the Negotiable Instruments Act provides for taking cognizance of the offence under S.138. Complaint should be filed in writing by the payee or holder in due course. S.142 of the Act reads as follows:
142. Cognizance of offences : Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), -
(a) no court shall take cognizance of any offence punishable under S.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; ........
(b) xx xx xx xx
(c) xx xx xx xx" (underlining for emphasis)
Proviso (b) and (c) of S.138 and S.142(a) of the Act together would show that it is the payee or the holder in due course of the cheque who has to issue notice of dishonour and on getting the notice, it is for the drawer to pay the amount of the cheque to the payee or holder in due course and if the above is not paid, it is for the payee or holder in due course has to file the complaint to the Magistrates Court.
(3.) Now, we will consider the definition clauses. Payee is defined under S.7 of the Act as follows:
The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the payee."
Holder in due course is defined in S.9 as follows:
'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 endorsee 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.
The contention raised by the petitioner in this case is that, admittedly, complainant is not the payee of the cheque. She filed the complaint as a legal representative. Legal representative of the payee is not a holder in due course. The complainant in this case came to the possession of the cheque only as a legal heir of the deceased and not by paying consideration to him or by endorsement of the cheque to him by the original payee. S.75 of the Act is also important in this matter. S.75 of the Act reads as follows:
75. Presentment by or to agent, representative of deceased, or assignee of insolvent : Presentment for acceptance or payment may be made to the duly authorised agent of the drawee, maker or acceptor, as the case may be, or, where the drawee, maker or acceptor has died, to his legal representative, or, where he has been declared an insolvent, to his assignee.
The above section only provides that if the maker of the cheque is dead, payment can be demanded from the legal representatives of the drawee, maker or acceptor. But, heading of the section is very wide and it shows presentment of the negotiable instrument can be made by the representative of the deceased also. Even though under the above section, presentment can be made to the legal representative of the maker or drawee of the cheque, legal heir of the maker or drawee of the cheque is not liable for criminal action under S.138 of the Act.;