ORDER
R. Balasubramanian, J.
1. The revision petitioner is the accused in C.C.No.98 of 1999 on the filed learned Judicial Magistrate, Thriuchegode. The respondent is the complainant therein. That was a complaint taken on file under Section 138 of the Negotiable Instruments Act, Pending trial, the revision petitioner filed Crl.M.P.No.1310 of 1999 to discharge him from the proceedings. That petition was dismissed. Hence, the present revision. Heard Mr.S. Ashok Kumar, learned Counsel appearing for the revision petitioner and Mr.K. Manimaran, learned Counsel appearing for the respondent.
2. The only point urged before this Court by the learned counsel for the revision petitioner is that the complaint as presented before the trial court by the complainant is not maintainable in law. In elaborating the submission, the learned counsel would state that, either a “payee” or a “Holder in due course” alone can file the complaint. The present complainant is neither a “payee” nor a “Holder in due course” and therefore the complaint ought not to have taken on file. The learned counsel took me through the necessary facts available in this case as culled out in the complaint itself, in support of his argument, about which I will refer a little later in this order.
3. To a question put to the learned counsel for the revision petitioner as to whether the point put forward before this court was taken in the same substance and form before the Lower Court for discharge, the learned counsel fairly stated that such specific stand was not taken. However he added that the point that was taken before the Lower Court is that, the complainant has no locus standi to file the complaint, and such a point would include the point raised before the court. In view of the fact that the point urged before this Court has not been specifically put forward in the same substance and form before the Lower Court, I wanted to know from the learned Counsel for the respondent as to whether he is willing to meet the point here or he would like to go back to the Lower Court when the accused is given the liberty to raise this point in another discharge petition to be filed by him. The learned counsel for the respondent realising that sending back the matter would again involve judicial time, fairly stated that he is prepared to meet the point here itself. Accordingly, this point was taken up for consideration.
4. The averments in the complaint undisputedly show the following facts:
“The complainant is the Managing Partner of Sri Golden Yarn; the accused is doing textile business with the said firm; the accused issued post-dated cheques in favour of one Rathinam, Partner of Sri Golden Yarn for the amounts due by him; the said payee and the complainant endorsed the cheque in favour of the Proprietor of Pearl Fabrics; the Proprietor of Pearl Fabrics presented the Cheques for collection through his Bank; the cheque was returned dishonoured; the proprietor of Pearl Fabrics returned the cheque to the complainant; legal formalities have been complied with and the complaint came (o be lodges by the present complainant.”
5. Therefore, the undisputed fact as available in the complaint itself is that “the payee” namely, Rathinam endorsed the cheque before the cheque becomes payable to the Proprietor of Pearl Fabrics. Pearl fabrics presented the cheque for collection and it was dishonoured. After such dishonour and return of the cheque. Pearl Fabrics returned the cheque to the complainant and after complying with the statutory formalities, the complainant had lodged this complaint.
6. Notice has to be issued, prior to lodging of a complaint, under Section 138 of the Negotiable Instruments Act. Such notice has to be given only by a “Payee” or a “Holder in due course” of the cheque, as provided for under Section 138 of the Negotiable Instruments Act. Under Section 142 of the Said Act:
“no court shall take cognisance of any offence punishable under Section 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.”
Therefore, a reading of the two sections as referred to above, would show that there cannot be any doubt at all that a complaint under Section 138 of the Negotiable Instruments Act can be lodged only by a “payee” or a “holder in due course”. Rathinam, the payee mentioned in the cheque or the firm with which he was associated might have had the authority to lodge the complaint, if the cheque was returned dishonoured, when it was presented by them for collection, as he would come within the definition of “Payee”. “Holder in due Course” is defined under Section 9 of the Negotiable Instruments Act.
7. A Division Bench of this court in the judgment reported in Sukanra Khimraja v. N. Rajagopalan, 1989 (1) LW 409 had an occasion to consider the issue as to who would be the “Holder in due course” as defined under Section 9 of the Negotiable Instruments Act. The facts available in that case are as follows:
“the payee is one “M” when she presented the cheque for collection, it was returned, she endorsed it in favour of her brother “R”, the endorsee made a demand for payment’ the payment was not forthcoming; later on “R” the endorsee filed the suit; the question which arose there was whether “R” was the holder in due course and whether he could file a suit.”
In that context it was held as follows:
“In the instant case, plaintiff as the brother of “M” was fully aware that the cheque had been dishonoued, and the endorsement in his favour was only after it was returned by the Bank. Therefore, Ex-A.l had lost its negotiability. Hence, he cannot be a holder in due course.”
This judgment clearly lays down that, after the dishonour of the cheque, at the first instance it loses its negotiability and therefore any endorsement made thereafter on such an instrument would not make the endorsee a “Holder in due Course.”
8. Now, applying the above judgment to the facts of this case, it is clear that the present complainant would have no locus standi at all to file the complaint. The relevant facts are reiterated once again hereunder:
“The payee is one Rathinam; he and the complainant endorsed the cheque in favour of the proprietor of Pearl Fabrics; Pearl Fabrics presented it for payment and it was dishonoured; subsequenlly Pearl Fabrics returned the cheque to the complainant, who filed the complaint.”
Therefore there cannot be any doubt at all that the complainant is neither a ‘payee’ nor a “Holder in due course”. The return of the cheque by the Proprietor of Pearl Fabrics after it was dishonoured, would not give a legal right to the complaint to assume the role of a payee or a Holder in due course.
9. Under these circumstances, 1 have no doubt at al that the complaint itself ought not to have been taken on file. Therefore, I am inclined to set aside the order under challenge on the ground that the complainant is neither a “Payee” nor a “Holder in due course” and therefore he cannot legally maintain the complaint. In other words, the complaint lodged before the Lower Court is without any authority. Accordingly, the revision is allowed and the accused is discharged from C.C.No.98 of 1999 on the file of Judicial Magistrate, Thriuchegode. Consequently, Crl.M.P.No.8459,8460 of 1999 and 566 of 2000 are also closed.