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2017 (4) TMI 1568 - GUJARAT HIGH COURTDishonor of Cheque - Whether the wife by virtue of her status as a wife of the payee of the cheque can be said to be “a holder in due course”? - whether she can be a competent complainant to lodge complaint under Section 138 of the Negotiable Instruments Act, 1882 - holder in due course - legal heir for receipt of money - HELD THAT:- The concept of “holder” is in Section 8 of the Act whereas the connotation “holder in due course” is a special concept under the Act which Section 9 speaks of. As per Section 8, holder of a promissory note, cheque etc., means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. The “holder in due course”, meaning of which bears relevance to the controversy, means any person who for consideration become the possessor of a promissory note, bill of exchange or cheque, if payable to the bearer or the payee or endorsee thereof if payable to order before the amount mentioned in it becomes 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 gist ingredient of the concept “holder in due course” is that “holder in due course” is a person who becomes possessor of instrument-the cheque etc., and that he becomes such possessor and possession thereof for a consideration, leaving the other conditions mentioned in the provisions standing satisfied - it would not be right to simply say that every possessor of a promissory note or cheque or bill of exchange is a holder in due course. What is trite is that he must be one who is the possessor of the instrument for a consideration. It is not the holder of the cheque but the holder in due course of the cheque who acquires a legal competence and locus standi in law to base an action on the basis of returned cheque. The legal connotation “holder in due course” has twin important essentials to carry. A person in order to become a holder in due course within the meaning of Section 9 of the Act must be in possession of a promissory note, bill of exchange or cheque, as is in the present case; at the same time, mere becoming possessor of the cheque etc., would not suffice. A person to the possessor of the instrument has to be for a consideration. It is indispensible ingredient for being clothed with the legal capacity of “holder in due course” is that the person in possession of the instrument, must have been in the possession for some consideration - merely being an heir of payee, though may be in possession of instrument, would not automatically make such heir or legatee a 'holder in due course' within the meaning of Section 9 of the N.I. Act. The concept of holder in due course does not recognize such position, besides which the ingredient of being a possessor for consideration has to exist. Respondent No.2 wife, in absence of possessing such ingredient-capacity, cannot claim locus standi in law to become a complainant under Section 138 of the Act. The respondent No.2-wife only on the ground of she being a wife or on the ground that she was an heir of the husband to receive money cannot be treated as “holder in due course” within the meaning of Section 9 of the Act. A locus standi for her cannot be conceived in law to be one entitled to file a complaint under the N.I. Act. If she is claiming any right over the amount of cheque in capacity of heir, her remedy would be in civil law. Complaint at her instance under the N.I. Act, however cannot be maintainable, she having no locus standi to be a complainant under the N.I. Act. Application disposed off.
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