Judgments related to Negotiable Instruments Act

Judgments related to Negotiable Instruments Act

 

A private complaint under s.138 of NI Act is filed by a father against one of this daughter. In the mid-trial, the complainant passed away, and his another daughter appeared before the court and filed an application under section 302 of CrPC r/w 256 of CrPC to permit her to proceed with the complaint. However, the accused vehemently objected the said application on the ground that when both of them are the legal heirs of their deceased father, the proposed complainant cannot permitted to proceed with the complaint. Can it be allowed when both the accused and proposed complainant are the legal heirs of the deceased complainant?

Yes. She can be permitted to proceed with the complaint. The proceedings under section 138 of NI Act is governed by code of criminal proceedure and the question of who is actual legal heir of the complainant is immateial and any person can be permitted to conduct the prosection if the court thinks fit to do so.

In this regard, it is worth while to refer the Landmark Judgment of the Kerala High Court in the case of Sebastian v. State Of Kerala [Criminal Misc. Case No.

5861 of 1999,C.R.M.C No. 5861 of 1999] 2004 KLT (1) 457 wherein it has been held as follows:

“Under section 256(1) of the Code of Criminal Procedure a

complainant's absence can lead to three different

consequences. They are:

(1) the learned Magistrate may acquit the accused.

(2) the learned Magistrate may adjourn the case.

(3) the learned Magistrate may proceed with the trial if

personal attendance of the complainant is not

necessary.

Sub-section (2) of section 256 stipulates that even if the

non-appearance of the complainant is because of his/her

death, the consequences enumerated under section 256(1)

would follow. Though there is no specific provision in that

regard available in the Code of Criminal Procedure, relying

on precedents and principles the Court held that adjourning

the case consequent to the death of the complainant is

therefore within the powers of the Magistrate. This Court

further proceeded to observe that if in the meanwhile one of

the legal representatives of the deceased complainant or a fit

person comes forward and seeks permission to continue the

proceedings, it is perfectly within the powers of the

Magistrate to permit him to do so.

It is hence very evident that it is not even necessary that

such person who seeks permission of the learned

Magistrate to continue with the prosecution must be a

legal heir or even a legal representative of the deceased

complainant. It is enough if he is a fit and proper person.

I would go one step further and observe that it is not at

all necessary that any person should apply to come on

record to continue the proceedings. Even without that if

the learned Magistrate chooses to follow the third of the

three options available (referred to earlier) there is no

impropriety or illegality. The learned Magistrate can

Negotiable Instrument Act 1881 44 Of 67

certainly proceed with the matter without impleading

anyone”

A husband and wife, approached the complainant and they borrowed a sum of Rs 500000/- from him. The husband, towards the repayment of the borrowed amount, signs and issues a cheque drawn at the joint account maintained by himself and his wife. Under the

given scenario, Whether both of them can be arrayed as accused and prosectued for the offence under section 138 of NI Act?

Answer is ‘NO’.

A joint account holder who is not a signatory to cheque shall

not be prosecuted under section 138 of NI Act.A person

might have been jointly liable to pay the debt, but if such a

person who might have been liable to pay the debt jointly,

cannot be prosecuted unless the bank account is jointly

maintained and that he was a signatory to the cheque.

Section 141 of the NI Act is relating to the offence by

companies and it cannot be made applicable to the

individuals. A useful reference in this regard can be taken

from the judgement of the Apex court in the case of "Mrs.

Aparna A.Shah v. M/s. Sheth Developers Pvt. Ltd."

[AIR2013SC3210]

If wife issues a cheque to discharge husband’s liability

and it gets dishonoured, can the wife be prosecuted under S. 138 NI

Act?

M. Jaishankar v. Sree Gokulam Chits and Finance Corpn.

(P) Ltd., 2020 SCC OnLine Mad 5550, decided n 04-12-

2020 the Hon’ble Madras High court held that

If a cheque is issued by a person in discharge of the liability

of another person and if the cheque is dishonored, the

person, who issued the cheque can be prosecuted under

Section 138 NI Act.