IMPORTANT POINT
The prosecution under Section 138 of the NI Act by an unregistered firm is valid, and the authority of a partner to file a complaint is upheld, emphasizing the importance of compensatory justice.

JUDGMENT :

Sophy Thomas, J.

This appeal is at the instance of the complainant in C.C.No.351 of 2001 on the file of Chief Judicial Magistrate Court, Kasaragod, impugning the judgment in Crl.A No.372 of 2004, by which the trial court judgment was set aside, and the accused was acquitted under Section 138 of the Negotiable Instruments Act (for short, ‘the NI Act’).

2. The complainant-M/s.Kasaragod Self Employees Financing Company(R), represented by its General Power of Attorney holder, filed a complaint under Section 138 of the NI Act against the accused, alleging that the accused, towards discharge of the amount borrowed by her from the complainant firm, issued Ext.P2 cheque dated 15/5/2001 for an amount of Rs.19,78,000/-, assuring that it would be honoured on presentation before the bank, and the complainant presented the cheque before the bank for encashment, but it was returned dishonoured for the reason ‘insufficient funds’. Though statutory notice was sent to the accused in her correct address, it was returned unclaimed, and the amount was not repaid. Hence, the complaint.

3. After taking cognizance and on appearance of the accused before the trial court, particulars of offence were read over and explained, to which she pleaded not guilty and claimed to be tried.

4. Thereupon, PWs 1 to 3 were examined, and Exts.P1 to P7 were marked from the side of the complainant.

5. On closure of complainant’s evidence, accused was questioned under Section 313 of Cr.P.C. She denied all the incriminating circumstances brought on record, and stated that she is a housewife, and she never issued any cheque in favour of the complainant, and Ext.P2 cheque was not drawn from her account. The transaction was between her husband and one Mr.T.V Gangadharan. Her address shown in the notice was not correct.

6. DWs 1 to 3 were examined and Exts.D1 and D2 were marked from the side of the accused. Exts.X1 to X3 were marked as witness exhibits.

7. On analyzing the facts and evidence, and on hearing the rival contentions from either side, learned trial court found that, an offence under Section 138 of the NI Act was made out against the accused, and so she was convicted and sentenced under Section 138 of the NI Act, to undergo simple imprisonment for six months and to pay compensation of Rs.15 lakh, with a default sentence of simple imprisonment for three months.

8. Aggrieved by the conviction and sentence, the accused preferred Crl.A No.372 of 2004 before the Additional Sessions Judge (Adhoc)-I Kasaragod. Learned appellate court allowed the appeal, setting aside her conviction and sentence, finding that PW1 had no authority to file the complaint, and the address in which the statutory notice was sent, was not the correct address of the accused. Moreover, being an unregistered firm, the complainant company could not have initiated prosecution against the accused, under Section 138 of the NI Act. Aggrieved by the judgment of the appellate court, the complainant has preferred the present appeal.

9. Heard learned counsel for the appellant/complainant and learned Amicus Curiae for the 1st respondent/accused.

10. For the purpose of convenience, the appellant, and 1st respondent shall be referred as the complainant and accused respectively.

11. The complainant is assailing the impugned judgment in Crl.A No.372 of 2004, mainly on three grounds. Firstly, that the appellate court failed to note that, there was a validly executed power of attorney by the managing partner of the complainant firm, in favour of PW1, for filing the complaint. Moreover, PW1 was a partner cum accountant of that firm, and so he was familiar with the transaction involved in this case.

12. Secondly, the appellate court did not realise the fact that, though the accused was disputing her address in the statutory notice sent by the complainant, her vakalath shows the very same address as in the notice sent by the complainant. The evidence adduced by PW3-the postman was also there, to show that the statutor