IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Rajani Dubey, J.
C.C.N. Entertainment (India Pvt. Ltd.) Through: Director, Abhishek Agrawal - Appellant
Versus
Shrikant Verma S/o K.K Verma - Respondent
ACQA No. 5 of 2017
Decided On :
(A) Negotiable Instruments Act, 1881 - Section 138 - Acquittal appeal against judgment of acquittal by the trial court - The respondent was acquitted on grounds of complaint not filed by competent authority, breaching Section 142-A - The court emphasized that defects in authority to file a complaint can be rectified at any stage. (Paras 2, 5, 11, 14)
(B) Legal representation of companies - A complaint made in the name of a company must be represented by a natural person, and defects in representation can be cured. (Paras 11, 12)
Facts of the case:
The appellant/complainant company filed a complaint against the respondent for dishonor of a cheque issued for services rendered. The trial court acquitted the respondent, citing lack of proper authority in filing the complaint.
Findings of Court:
The trial court's acquittal was based on technical grounds regarding the authority of the power of attorney holder, which the appellate court found to be incorrect.
Issues: The main issues were whether the complaint was filed by a competent authority and if the defects in the complaint could be rectified.
Ratio Decidendi: The appellate court ruled that the defects in the authority to file a complaint are curable and that the trial court erred in acquitting the respondent on such technical grounds.
Result: The appeal is allowed, and the respondent is convicted under Section 138 of the Negotiable Instruments Act.
Judgment :
(Rajani Dubey, J.)
1. This present acquittal appeal is preferred under Section 378 (4) of the Code of Criminal Procedure, against the judgment dated 03.10.2016 passed by learned Judicial Magistrate First Class, District- Bilaspur (C.G.) in Complaint Case No. 13856/2014, whereby the respondent /accused was acquitted of the charge under Section 138 of Negotiable Instruments Act, 1881.
2. Brief facts of the case as adumbrated is that appellant/complainant company and the respondent/accused had entered into an agreement, on 14.08.2008, wherein the respondent/accused had obtained signal for free during the period from month of September 2008 to month of November 2008 and thereafter made payment of the cost of the signal obtained. That, the respondent/accused had obtained signal from appellant/complainant company in the month of June 2009 and had issued question cheque no. 327252 dated 15.06.2009 to the tune of Rs. 49,158/- of Punjab National Bank Branch Sadar Bazar Bilaspur for the cost of signal the respondent had obtained. The appellant/complainant company presented the said cheque before Axis Bank branch Bilaspur for withdrawal , where the appellant/complainant company was apprised that Cheque No. 327252 was dishonoured due to insufficient funds in his bank account on 17.06.2009. Thereafter, appellant/complainant company sent a legal notice dated 16.07.2009 through his advocate and the same was received by the respondent/accused. Despite receiving the notice, the respondent/accused did not pay the cheque amount within the stipulated time period, as such, a complaint under Section 138 of Negotiable Instruments Act, 1881 was instituted before the Judicial Magistrate First Class, Bilaspur, which was registered as Complaint Case No. 13856/2014. Upon appreciation of the evidence and record and after hearing the parties, learned Trial Court has acquitted the respondent/accused of the said charge levelled against him on the ground that the complaint has not been filed by the competent authority and preferred the breach of section 142-A of the Negotiable Instrument Act,1881. Hence, this acquittal appeal filed by the appellant/complainant company.
3. In support of the complaint, the appellant/complainant company examined its Director Abhishek Agrawal as CW-01 and in his defence the accused/respondent has examined 02 defence witnesses.
4. The learned trial Court after appreciating the oral and documentary evidence by judgment dated 03.10.2016, acquitted the respondent of the offence under Section 138 of the Negotiable Instruments Act, 1881. Hence, this acquittal appeal filed by the appellant/complainant.
5. Learned counsel for the appellant submits that the impugned judgment is illegal, erroneous and contrary to the facts and circumstances of the case as well as law and passed against the provisions of Negotiable Instruments Act, 1881. The learned trial Court acquitted the respondent on this ground that the complaint has been filed by the power of attorney holder beyond power of filing the complaint which is illegal and perverse in the eyes of law. The learned trial Court ignored Ex. P/08 and concluded that Mukesh Mishra has no rights to file complaint on behalf of Complainant Company. The learned trial Court wrongly concluded that the complaint is not filed in accordance with law because Director namely Abhishek Agrawal has not verified and produced the complaint and the learned trial Court overlooked the principle that complaint could not have been dismissed on the ground that complaint was defective and company could with the permission of the court at any stage also rectify the alleged defect, as per 2006(2) MPHT 396. The learned trial Court wrongly acquitted the appellant on the basis of defect of the power of attorney and signature. These defects are curable as per the principle laid down by the Hon’ble Apex Court in the matter of Indra Kumar Patodiya and Ors. Vs. Reliance Industries Limited and Ors. reported in 2013(1) Crimes
Defects in authority to file a complaint under the Negotiable Instruments Act are curable, and acquittal on such technical grounds is erroneous.
Power of attorney holders can file cheque dishonour complaints if they possess personal knowledge of the transaction; absence of such knowledge may invalidate the complaint.
A complainant must demonstrate ownership as the payee or holder in due course to maintain a complaint under Section 138 of the NI Act; failure to establish this results in dismissal.
The court emphasized that under Section 138 of the Negotiable Instruments Act, there is a presumption that cheques are issued for discharging legal liabilities, which the accused must rebut.
A complaint under the Negotiable Instruments Act must be filed in the name of the corporate entity, and valid statutory notice of dishonour is a prerequisite for prosecution.
The burden of proof lies on the complainant to establish the case beyond reasonable doubt in a complaint under Section 138 of the NI Act.
The appellate court must respect trial court findings of acquittal unless substantial errors are demonstrated, maintaining the presumption of innocence.
A cheque issued by a Firm does not implicate the proprietor unless the Firm is named in the complaint, requiring clear averments regarding sole proprietorship for liability under Section 138.
A cheque issued by a Firm does not implicate the proprietor unless the Firm is named as an accused; absence of sole proprietorship averment in the complaint is fatal.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.