TMI Blog2005 (2) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... brevity). It is alleged inter alia in the complaint that the second accused in the course of business transactions he had with the complainant purchased silk sarees from the complainant on credit basis. In discharge of the said debt, the second accused gave a cheque bearing No. 740630 dated February 27, 2002, drawn on South Indian Bank Limited, Kanchipuram Branch, for a sum of ₹ 30,000 to the complainant. The said cheque was signed and issued by the first accused in favour of the second accused. The second accused gave the said cheque to the complainant with the permission of the first accused. The complainant accepted the said cheque on the promise made by both the accused that the cheque would be honoured by the banker on its prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arently, the cheque in question was signed by the first accused and was drawn in favour of the second accused. The name of the complainant, therefore, does not appear on the instrument. Confessedly, the cheque was given to the complainant by the first accused in the presence of the second accused and on the promise made by both the accused that the cheque would be honoured on its presentation, he received the cheque and thereby he became the holder in due course of the said cheque. Perhaps on that premise, he laid the complaint against both the accused. It is therefore appropriate here to consider the question as to whether the complainant is the holder in due course or not. 6. The provisions germane in the context for consideration are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same and is called the indorser. 10. This clearly shows that the holder of a cheque for the purpose of negotiation of the same shall sign on the back or face of the cheque or on a separate slip annexed thereto. Then only he is said to have endorsed the same for the purpose of negotiation. 11. The word negotiation is again defined under Section 14, which reads as under : 14. Negotiation.--When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reads as under : Consideration.--When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. 14. From a reading of the above provision it is obvious that consideration need not be in cash. But yet, the other invariable requirement is that the person who is in possession of the instrument must be a holder thereof, as discussed hereinabove. 15. The apex court in U. Ponnappa Moothan Sons v. Catholic Syrian Bank Ltd. considered the definition of a holder in due course in the Indian law vis-a-vis the definition as laid down in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant to possess the same in his own name so as to receive or recover the contents thereof from the parties thereto. The complainant, therefore, cannot be considered to be a holder , much less a holder in the due course . 19. Under Section 138 of the Negotiable Instruments Act a complaint can be lodged only by the payee or holder in due course. The Section reads as under: 138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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