The judgment emphasizes the importance of meeting the legal requirements for proving dishonour of cheques under Section 138 of the N.I. Act, including proper authorization, discharge of liability, and valid service of statutory notice.

1. The appellant filed C.C.No.165/1996 on the file of the learned Judicial Magistrate No.I, Namakkal against the respondent herein alleging that the respondent had committed offence punishable under Section 138 of the Negotiable Instruments Act. The learned Magistrate by judgment dated 7.8.2000 found the respondent guilty under Section 138 of the N.I. Act and accordingly, imposed a sentence of rigourous imprisonment for one year. Challenging the same, the respondent preferred an appeal in C.A.No.59/2002 before the Additional District Judge, Fast Track Court, Namakkal. The said appeal came to be disposed of by judgment dated 18.11.2002. The lower appellate court set aside the conviction and sentence imposed by the trial court and acquitted the respondent. Aggrieved over the same, the appellant is before this Court with this appeal against acquittal.

2. The facts of the case in brief would be as follows:

The appellant is a Public Limited Company, incorporated under the Companies Act and the same is carrying on the business in hire purchase and leasing. It has got its registered office at No.475, Dr. Nanjappa Road, Coimbatore. The said company has a branch office at Namakkal. The respondent entered into a hire purchase agreement with the appellant company on 26.3.1995 for the purchase of three Ashok Leyland LPG Tankers. His wife Mrs.Lakshmi Selvaraj stood as a guarantor. As per the agreement, the respondent agreed to repay the loan amount of R.10,26,698/- together with interest in 42 monthly instalments. But he committed default. When the same was demanded, the respondent issued three cheques for a total sum of Rs.29,95,538/-. The first cheque was for a sum of Rs.16,30,538/-, the second cheque was for Rs.3,65,000/- and the third cheque was for Rs.10,00,000/-. Thus the total amount due under all the three cheques was Rs.29,95,538/- and the three cheques were presented for collection. But they were dishonoured since there was no sufficient fund in the account of the respondent to honour the cheques. Therefore, the appellant company issued a statutory notice as required under Section 138 of the N.I. Act on 18.5.1996. The said notice was received by the respondent on 20.5.1996. But he did not comply with the notice. Therefore, a private complaint was lodged by the appellant before the Judicial Magistrate No.I, Namakkal.

3. Before the trial court on the side of the complainant, as many as 4 witnesses were examined and 8 documents were exhibited. P.W.1 was the Branch Manager of the Namakkal Branch who has spoken to about the hire purchase agreement between the respondent and the appellant company and also the issuance of three cheques in question by the respondent and all the other subsequent facts including the issuance of statutory notice. P.W.2 was the then Law Assistant working at the Head Office of the appellant company who has spoken to about the statutory notice issued to the respondent by the head office. P.Ws.3 and 4 are the officials of the bank who have spoken to about the dishonour of the cheques. So far as the documents are concerned, Ex.P.1 is the Power of Attorney executed by the company in favour of P.W.1 to lay a private complaint. Ex.P.2 are the cheques in question. Ex.P.3 is the memo from the bank indicating the dishonour of the cheque. Ex.P.4 is the copy of the notice dated 18.5.1996 and Ex.P.5 is the letter given by the postal authorities evidencing the service of notice on the respondent. Ex.P.6 is the account book maintained. Ex.P.7 and Ex.P.8 are also similar records pertaining to the hire purchase agreement.

4. The respondent contended before the lower court that P.W.1 had no authority to lay a private complaint on behalf of the appellant because there was no authorisation given by the company nor was there any resolution passed by the company authorising P.W.1 to lay the complaint. He would further submit that the cheques were not given in discharge of any enforceable legal liability. Per contra, it was