D.K. Seth, J. - (1.) An order of status quo was granted on 6.4.2001 when this matter was moved with direction to serve the parties. Accordingly copy of the application has been served and this matter is being moved today. Learned Counsel appearing on behalf of the petitioner insisted that an interim order should be granted by continuing the order of status quo with further order for deposit of the cheques mentioned in the petition. The said prayer is being opposed on behalf of the defendant No. 1. It is contended that the order of status quo should be vacated and no interim order should be granted. Mr. Sarkar had pointed out that the plaintiff under a particular scheme 'cash on pay out' had been functioning in the depository segment of the stock market. Under the said scheme immediate cheques used to be issued by the plaintiff which was payable on presentation on the date mentioned after pay out of funds made by the Stock Exchange. The defendant No. 2 by his letter dated 2.3.2001 accepted the advantage of this scheme. In the said letter contained in Annexure A the defendant No. 2 had pointed out that the cheque will be presented for payment only after pay out of funds are made by the Stock Exchange. It had also enclosed a format which was required by its banker and requested the plaintiff to enclose the cheque along with the letter on the line of the format addressed to the banker of the defendant No. 2. Accordingly, the plaintiff had issued a cheque for the respective amounts along with a letter in the format as above on 2.3.2001 addressed to the defendant No. 1. the banker of the defendant No. 2. Amongst various conditions, it. was also mentioned that the cheque will be presented for payment on the next day of pay out of rolling settlement No. 2001519 of the Calcutta Stock Exchange for the settlement of trades executed on 2.3.2001. By a letter dated 13.3.2001 addressed to the United Bank of India on which the cheques were drawn, the banker of the plaintiff was asked to stop payment in case of its presentation. The said letter is in Annexure C. On the same date the letter was addressed to the defendant No. 2 asking him not to present the said cheques till the payment is received by the plaintiff from the Calcutta Stock Exchange. This letter is in Annexure D. On the same date by a letter addressed to the defendant No. 1 contained in Annexure E the plaintiff had informed that there is likelihood of nonpayment of the amount by the Calcutta Stock Exchange on account of the imminent crisis reported in the newspaper and the pay out may not take place as scheduled. Therefore it was informed that the cheque may not be honoured, if presented, since funds have not been received and it would be paid as soon funds are received. By a letter dated 13.3.2001 the defendant No. 2 informed the plaintiff that the said cheques were discounted by the defendant No. 2 in favour of the defendant No. 1 on 5.3.2001. By reason of such discounting the defendant No. 1 has become the holder in due course under the Negotiable Instruments Act and therefore it had given notice to proceed for recovery of the amount against the plaintiff. On 24.3.2001 the defendant No. 2 had given a notice purporting to be one under Sec. 138 of the Negotiable Instruments Act on account of stop payment of the said cheques. In this background this suit has been filed for declaration that the said cheques were void and for certain other reliefs including injunction.
(2.) Mr. Sarkar had contended in support of his case that the cheque was an account payee cheque issued in the name of the defendant No. 2 striking out the expression 'bearer'. Therefore the cheque is pure and simply an account payee cheque. Thus it is not a negotiable instrument under Sec. 9 of the Negotiable Instruments Act until 14.3.2001, namely, the date of the cheque. He again contends that the cheques were issued along with letters which formed terms of the cheque which could not be incorporated in the cheque itself. Thus even if it is a negotiable instrument still then it is subject to the conditions incorporated in the offer and the acceptance which made it payable though on a particular date but only after pay out of the funds by the Calcutta Stock Exchange. Therefore, until and unless the condition is fulfilled and the payment is received, the cheque does not become payable even on demand. Therefore it cannot be treated to be a negotiable instrument before the date mentioned on the instrument. Therefore the said cheque could not be discounted by the defendant No. 1 at the instance of the defendant No. 2 and as such the defendant No. 1 could not be a holder in due course according to Sec. 8 of the said Act. He also points out that a cheque as defined in Sec. 6 is a cheque only when it is payable to bearer/order, and not otherwise. Thus, it is not a cheque within the meaning of the Negotiable Instruments Act so long it is inscribed 'account payee'. There are two limbs of his argument One. is that the cheque being account payee cheque, the same can never be a negotiable instrument nor a cheque within the meaning of the said Act, particularly when the same is a post -dated one. The other limb is that it cannot also be treated to be a negotiable instrument and not as a cheque before the 14th March, 2001 by reason of its being account payee which does not satisfy the test of negotiable instrument laid down in Sec. 9. Therefore, according to him, the defendant No. 1 cannot claim to be a holder of the negotiable instrument by reason of its claim discounted on 5.3. 2001. He also relies on para 7 of the decision in the case of Electronics Trade & Technology Development Corporation Limited, Secunderabad vs. Indian Technologists & Engineers (Electronics) Pvt. Ltd. & Anr., reported in : AIR 1996 SC 2339, to contend that Sec. 138 has no manner of attraction in respect of a cheque where the cheque is sought to be presented after the drawer was requested not to present the cheque before the cheque becomes presentable or could be presented. Therefore, Sec. 138 of the Negotiable Instruments Act could not be attracted in such a case and as such any injunction granted in this case staying the operation of the cheque or the notice under Sec. 138 will not be hit by clauses (b) and (d) of Sec. 41 of the Specific Relief Act. On the other hand, the relief being claimed under Sec. 41 of the Specific Relief Act, the effect of such an instrument can be stayed during the consideration of the relief available under Sec. 41 of the Specific Relief Act. Relying on the decision in the case of Anil Kumar Sawhney vs. Gulshan Rai, reported in, (1994) 79 CC 150, he points out in support of his contention that a cheque which is account payee' is not a negotiable instrument. He also relied on a decision by the Special Bench in the case of Tailors Priya vs. Gulabchand reported in : AIR 1963 Cal. 36 and contends that there was a difference between the English Law and the Indian Law where account payee cheques were not regarded as non -negotiable instrument. There was a distinction. The principle of the English Law was troubling the learned Judges delivering the Special Bench decision which is apparent from paras 16, 17 and 18 by D.N. Sinha, J. (as His Lordship then was) and para 25 by P.N. Mookherjee, J. (as His Lordship then was). In both these paragraphs the said Hon'ble Judges had expressed a feeling having regard to the English principle which was sought to be defined by Mookherjee, J. relying on Sec. 13 of the Negotiable Instruments Act. This feeling and anomaly had also formed favour with the English principle by reason by amendment in the Cheques Act, (England) whereby Sec. 81(a) was brought about by Cheques (Amendment) Act, 1992 indicating that account payee cheques are nontransferable and non -negotiable. This distinction sought to be made by the Indian Courts appears to have been followed by the English Statute. Thus, according to him, the same supports the contention of Mr. Sarkar to the extent that this instrument not being negotiable, the discounting of the same on 5.3.2001 does not make the defendant a holder in due course within the meaning of Sec. 8 of the said Act and as such he has not been able to make out a prima facie case for grant of an interim order. At the same time, he has also pointed out that from the facts as disclosed and Revealed, it is a case where an interim order should be granted even without notice in terms of the proviso to Rule 3 of Order XXXIX of the Code of Civil Procedure without any service on the defendants though however copies of the petitioner have been served without the copy of the plaint and notice of motion. Therefore, in the facts and circumstances of the case, an interim order should be granted forthwith.
(3.) Mr. Sen, learned Counsel for the defendant No. 1 opposes the contention of Mr. Sarkar on the ground that the said, cheque is a negotiable instrument and could be negotiated even before it became due and payable or even afterwards even if it was a post dated cheque. It may not come within the definition of Sec. 9 but still then it becomes a negotiable instrument as soon it is presented for discount according to the normal practice of the banking system. He contends that the endorsement 'account payee' will not take away the cheque outside the ambit of negotiable instrument He contends that Sec. 81A as amended in the Cheques Act in England has no manner of application in Indian cases. Relying on the decision reported in, AIR 1976 SC 563 (Hind Overseas Pvt. Ltd. vs. R P. Jhunjhunwalla & Anr.) he contends that the Indian Law has to be interpreted according to its own system. It cannot be interpreted, borrowing the principle from the English Law. Therefore, in the present case the endorsement account payee' does not change the character of the cheque as a negotiable instrument. He then contends that under Sec. 41 of the Specific Relief Act the present suit cannot be maintained which, in effect aims at obtaining an interim order to forbid the defendant No. 1 from proceeding under Sec. 138 of the N.I. Act Relying on the decision in the case of M/s. Electronics Trade and Technology Development Corporation Ltd. : AIR 1996 SC 2339, he contends that nation to stop payment will not detract application of Sec. 138 of the Negotiable Instruments Act as has been held in the said case since been followed in NEPC Micon Ltd. & Anr. vs. Magma Leasing Ltd., : AIR 1999 SC 1952. He also relied on a decision in the case of : AIR 1983 SC 1272 [Cotton Corporation of India Ltd. vs. United Industrial Bank Ltd. & Ors.). He had contended that there cannot be any injunction restraining a person from initiating a criminal proceeding as has been held therein. He supported his contention relying on the decision in the case of Indian Bank vs. Euro International Pvt. Ltd. ( : AIR 1999 Cal 200) which followed the said decision and laid down the identical principle. He also relied on a decision in Aristo Printers Pvt. Ltd. vs. M/s. Purbanchal Trade Centre, Guwahati, : AIR 1992 Gau 81, in order to sustain the same contention. He had pointed out from Ss. 138 and 139 of the N. I. Act that the present case satisfies the conditions laid down in Sec. 138 and that there is a presumption with regard thereto in terms of Sec. 139 and as such this court cannot grant injunction even indirectly which will prevent the defendant No. 1 from proceeding with the notice issued purported to be one under Sec. 138 of the N. I. Act He also contended that the terms of the contract between the plaintiff and the defendant No. 2 cannot bind the defendant No. 1. According to him by reason of the letter contained in Annexure 'B' which was directly addressed to the defendant No. 1 by the plaintiff, the defendant No. 1 is bound to make payment irrespective of what might be the relation or condition between the plaintiff and the defendant No. 2. In terms of the said condition contained in Annexure 'B' the plaintiff was bound to pay the defendant No. 1 and that it cannot stop payment of the cheque as assured in the said letter and that the said letter was issued in terms of the valid resolution passed by the Board of Directors and that the undertaking given In the said letter dated 2nd March. 2001 contained in Annexure 'B' was irrevocable and represents normal trade. In the present case whether it is a negotiable instrument or not. the stoppage of payment itself attracts the application of Sec. 138 read with Sec. 139 of the N. I. Act Since the defendant No. 1 is a holder in due course of the said cheque, the defendant No. 1 has every right to proceed with the notice under Sec. 138 which cannot be stayed by grant of injunction even if it affects the same indirectly For all those reasons according to him the application for injunction should fail and no interim order should be granted. The learned counsel for the defendant No. 2. however, did not make any submission with regard to the question of grant of interim order.;