NEGOTIABLE INSTRUMENTS ACT, 1881

Section 138

Dishonour of cheque - Appeal against denial of cross-examination of lender - Non-deposition of interim compensation - Whether rights of cross-examination can be denied by Court

Lender filed a complaint under section 138 against borrower, wherein Trial Court issued summons against the borrower and directed the borrower to deposit 20% of the cheque amount as interim compensation. The borrower filed an application for cross-examination of the lender, but he failed to deposit the interim compensation. Therefore, the Trial Court rejected the application, which was upheld by Sessions Court as well as High Court. The borrower filed an appeal against denial of right to cross-examine the lender. Held: The provision of the Act nowhere contemplates that an appellant who had failed to deposit interim compensation could be fastened with any other disability including denial of right to cross-examine the witnesses examined on behalf of the complaintant. Any such order foreclosing the right would not be within the powers conferred upon the Court and would, as a matter of fact, go well beyond the permissible exercise of power. Since the right to cross-examine lender was denied to the borrower, the decisions rendered by the courts were considered to suffer from an inherent infirmity and illegality. Thus, the order of denial of cross-examination of lender was set aside.

REFERRED :

FAVOUR : In favour of appellant

A.Y. :

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