When a cheque is issued in the name of a proprietary firm, the complainant must establish that they are the sole proprietor of the firm or are authorized to represent the firm in order to maintain a complaint under Section 138 of the Negotiable Instruments Act.

This appeal is filed against the judgment dated 10.10.2007 in S.T. 401 of 2006 on the file of the Judicial First Class Magistrate-I, Kottayam acquitting the accused of the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘NI Act’).

2. The appellant is the complainant and complaint was filed on the allegation that the complainant supplied rubberised coir mats to the accused for a total sum of Rs.1,84,821/- and towards the partial discharge of the said debt, the accused on 31.05.2004, issued a cheque for Rs.60,000/- and subsequently when the complainant presented the cheque for collection, the same was dishonoured for the reason ‘payment stopped by the drawer’ and in spite of issuance of statutory notice, the accused failed to pay the cheque amount.

3. Heard Sri. Ananthakrishnan A. Kartha, the learned counsel representing the learned counsel for the appellant on record, Sri. Amal Amir Ali, learned Amicus Curiae for the accused/first respondent and Sri. Vipin Narayan, the learned Public Prosecutor for the second respondent–State of Kerala.

4. In the trial court, PWs 1 to3 were examined and Exhibits P1 to P10 were marked from the side of the complainant. From the side of the accused, DW1 examined and Exhibits D1 to D4 were marked.

5. After considering the oral and documentary evidence on record and hearing both sides, the trial court found that the cheque was issued in favour of M/s. Shiva Rubbers and the complainant has not proved that she is the proprietrix of M/s Shiva Rubbers and that the complainant has not succeeded in proving the offence under Section 138 of the NI Act against the accused

6. The learned counsel for the appellant argued that the trial court has not properly appreciated the evidence of PWs 1 to 3 and there is no reason to disbelieve the evidence of PW1 that the complainant is the proprietrix of M/s Shiva Rubbers, the payee in the cheque, and that the accused has not adduced any reliable evidence to rebut the statutory presumptions in favour the complainant.

7. But, the learned counsel for the accused/first respondent pointed out that when the cheque was issued in the name of a firm, the proprietor of the firm cannot file a complaint in his name claiming to be the payee or holder in due course of the cheque, unless he establishes that the cheque was issued to him in his favour or that he was the sole proprietor of the firm. It is also pointed out that the complainant has not adduced any evidence to show that she was the sole proprietor of the firm, M/s. Shiva Rubbers, and therefore, there is no reason to interfere with the findings in the impugned judgment.

8. PW1 is the husband and power of attorney holder of the complainant, Parvathi Rani. Exhibit P1 is the power of attorney executed by the complainant in favour of PW1. The cheque dated 31.05.2004 in favour of M/s. Shiva Rubbers is marked as Exhibit P2. In cross examination, PW1 admitted that no document is produced to prove that M/s. Shiva Rubbers is a proprietary concern. He also admitted that no document is produced to show as to who is the proprietor of M/s. Shiva Rubbers. However, PW1 denied the suggestion that the accused never had any transaction with the complainant as alleged and that the complainant has obtained the blank cheque entrusted by the accused to Jaya Rubbers at Kottayam and thereafter, filed this false case against the accused. PW1 also denied the suggestion that Exhibit P2 cheque is not supported by consideration.

9. The Postmaster of Aymanam Post Office is examined as PW2 and he deposed that a registered article is delivered to the addressee, Shiva Rubbers, Shed No.3, Mini Industrial Estate, Aymanam, Kottayam on 10.09.2004. The Senior Manager of Central Bank of India, Mullakkal Branch, Alappuha is examined as PW3 and he deposed that an article bearing No. RLA 3125 was despatched from the Bank and the copy of the postal receipt in this connection was kept in the despatch register.

10. The accused is exami