Authority to file a complaint under Section 138 of the NI Act can be rectified at any stage, and presumptions favor the holder of the cheque unless rebutted.

J U D G M E N T

The complainant in CC No.238 of 2002 on the file of Additional Chief Judicial Magistrate, Ernakulam, filed this appeal challenging acquittal of the accused, under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), as per judgment dated 31.05.2007.

2. The complainant, M/s.Sree Gokulam Chit & Finance Company, is a Private Limited company having its registered office at Chennai and a branch office at MG Road, Ernakulam. The complainant is represented by its power of attorney holder, who is the Assistant Manager of that company. He is empowered to institute the complaint and to give evidence. The 2nd accused is M/s.Woodlands Jewellers and the 1st accused is its partner. Rs.2,13,000/- was due to the complainant, from the accused, towards future instalments of kuri transactions, which the 2nd accused had subscribed with the complainant-company. Towards discharge of that debt, the 1st accused issued Ext.P2 cheque dated 14.12.2001, assuring that, it would be encashed on presentation before the Bank. The complainant presented that cheque for collection but it was dishonoured for the reason, ‘A/c transferred to suit file. No Balance.’, as per Ext.P3 memo. Complainant sent Ext.P5 registered lawyer notice to the accused, and in spite of receipt of notice, they did not repay that amount, though a reply was sent with untenable contentions. 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, they pleaded not guilty and claimed to be tried. Thereupon, PW1 was examined and Exts. P1 to P10 and P10(a) were marked from the side of the complainant. On closure of complainant’s evidence, the accused were questioned under Section 313 of Cr.P.C. They denied all the incriminating circumstances brought out in evidence and according to them, they subscribed chitty conducted by the complainant, which was terminated on 12.11.1998. They paid the entire amount due, and thereafter their passbook was closed. Ext.P2 cheque was given by the accused, as a blank one, only as a security, when he bid the chitty. After closing the chitty, the accused demanded back the blank cheque given as security, but it was not returned, saying that it was kept in the head office at Madras. No defence evidence was adduced.

4. On analysing the facts and evidence, and on hearing the rival contentions from either side, the trial court acquitted the accused, finding that the complaint was not properly instituted, as PW1-Assistant Manager was not properly authorised to file the complaint or to give evidence on behalf of the company. Moreover, the complainant failed to prove that, Ext.P2 cheque was issued towards discharge of a legally enforceable debt. Aggrieved by the acquittal of the accused, the complainant has preferred this appeal. 5. Heard learned counsel for the appellant and learned counsel for the respondents.

6. Learned counsel for the appellant would contend that, since the complainant is a Private Limited company, which is an incorporeal body, only an employee or representative of the company can prefer the complaint. The company becomes a de jure complainant and its employee or other representative representing the company in the criminal proceedings becomes the de facto complainant. In a complaint, with regard to dishonour of a cheque issued in favour of a company, for the purpose of Section 142 of the NI Act, the company will be the complainant, and for the purpose of Section 200 of the Criminal Procedure Code, its employee, who represents the company, will be the de facto complainant. A company can be represented by an employee, or even by a non-employee authorised and empowered, to represent the company by a resolution or a power of attorney.

7. According to the appellant, Ext.P8 extract of the resolution empowered PW1-Sri.A.T.K.Ajayan, who was the Assistant Manager of the company, to file the complaint and t