A manager cannot sue in individual capacity for a cheque issued to a firm; only the firm may sue.

JUDGMENT :

(A. BADHARUDEEN, J.)

Being aggrieved by the judgment in C.C.No.706/2005 dated 04.04.2007 on the files of Judicial Magistrate of First Class Court-I, Perintalmanna, the complainant has come up in appeal arraying the accused as the 1^st respondent and State of Kerala as the 2^nd respondent.

2. Parties in this appeal shall be referred to as `complainant’ and `accused’ with reference to their status before the trial court, hereafter.

3. Heard the learned counsel for the complainant, the learned counsel for the accused and the learned Public Prosecutor in detail.

4. Perused the trial court records and the judgment under challenge.

5. Short facts:

The complainant Mr.K.Ramachandran filed a complaint before the Judicial Magistrate of First Class pursuant to dishonour of a cheque dated 20.06.1997 drawn on Vijaya Bank, Manjeri Branch, for Rs.65,000/- issued in favour of Kerala Roadways Ltd., by the accused. The trial court took cognizance for the offence punishable under Section 138 of the Negotiable Instruments Act (for short `N.I Act’ hereafter) and proceeded with trial.

6. During trial, PW1 and PW2 were examined and Exts.P1 to P6 series were marked on the side of the complainant.

7. No defence evidence was adduced though opportunity was provided to the accused to adduce evidence

8. On evaluation of the evidence, the trial court acquitted the accused. The reasons stated by the trial court to acquit the accused are two fold. The first reason as could be read out from the judgment is that there was no legal notice within the stipulated period and the second reason is that the cheque was issued towards the money due towards Keala Roadways Limited and not pertaining to any personal liability of the complainant.

9. On hearing both sides, the questions arise for consideration are:

(i) Whether it is legally permissible for the manager of a firm or company or a concern to sue in his individual capacity for the money due towards the firm, company or the concern? In such cases who is competent to prosecute the case?

(ii) Whether the verdict of the trial court would require interference?

(iii) The order to be passed?

Point No.(i)

10. In this case the trial court acquitted the accused mainly finding that the money covered by Ext.P1 cheque was due towards Kerala Roadways Ltd. and the same is not a personal liability towards the complainant, who was the manager of the firm. In a prosecution alleging commission of offence punishable under Section 138 of the Negotiable Instruments Act , 1881 (`N.I Act’ for short hereinafter), pursuant to dishonour of the cheque issued in favour of a firm or a company or a concern, the person who is legally entitled to lodge a complaint against the payer of the dishonoured cheque is the firm, company or the concern. No doubt, the firm, company or concern could be represented by an authorised officer. Section 142(1)(a) of the N.I Act provides that no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. So the persons entitled to lodge a complaint alleging commission of offence under Section 138 of the N.I Act are (1) Payee and (2) the holder in due course. The term `payee’ has been defined under Section 7 of the N.I Act as the person named in the instrument to whom or to whose order the money is by the instrument directed to be paid. As per Section 8 of the N.I Act, the `holder’ of a promissory note, bill of exchange or `cheque’ 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. As per Section 9 of the N.I Act, `holder in due course’ means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable